The USD/CAD pair is declining from 1.3700 as the US Dollar weakens ahead of the US core PCE inflation reading. In May, US Durable Goods Orders saw a marginal increase, while the Canadian economy is estimated to have grown by 0.3% in April.
Investors are closely watching the US core PCE data for May, as it will provide insights into the interest rate outlook. A soft inflation figure could lead to expectations of rate cuts by the Federal Reserve, while strong numbers could dampen those expectations.
Despite a slight rise in US Durable Goods Orders, the US Dollar is under pressure in the American session. On the other hand, the Canadian Dollar’s next move will be determined by the monthly Gross Domestic Product (GDP) report for April, which is expected to show a 0.3% expansion.
The USD/CAD pair is testing the breakout region of a Falling Channel chart pattern on an hourly timeframe, signaling a potential bullish reversal. A breakout above the 200-hour Exponential Moving Average at 1.3700 could lead to further upside.
A buying opportunity may arise if the asset surpasses the June 11 high near 1.3800, targeting levels at 1.3838 and 1.3900. Conversely, a breakdown below the June 7 low at 1.3663 could expose the pair to support levels at 1.3600 and 1.3547.
Overall, the USD/CAD pair’s movement is influenced by economic indicators and market sentiment, with investors awaiting key data releases to guide their trading decisions.