The USD/CAD pair is currently trading sideways near 1.3650 as investors await the release of the US core PCE Inflation data, which will impact Fed rate cut expectations. The US Dollar has been under pressure following weaker than expected Q1 GDP data, raising concerns about the economic outlook.
There is speculation that the Bank of Canada (BoC) may start cutting interest rates from June due to easing inflation, weak Retail Sales, and a soft labor market. Despite these expectations, the Canadian Dollar has remained strong against the US Dollar.
Technical analysis shows that the USD/CAD pair is correcting near the breakout region of the Ascending Triangle chart pattern on the daily timeframe. The 50-day Exponential Moving Average (EMA) near 1.3620 is expected to provide support to the US Dollar bulls.
The Relative Strength Index (RSI) is currently between 40.00-60.00, indicating a potential rebound in the USD/CAD pair. However, a breakdown below 40.00 could signal a bearish reversal.
In terms of trading opportunities, a buying opportunity may arise if the asset falls towards the April 8 high at 1.3617, targeting the April 11 low at 1.3661 and the resistance level of 1.3700. Conversely, a breakdown below the April 9 low around 1.3547 could lead to a test of the psychological support at 1.3500 and the March 21 low at 1.3456.
Overall, the USD/CAD pair remains in a tight range as investors await key economic data and monitor central bank actions for potential rate cuts.