During the Asian session, the USD/CAD pair shows ambiguous trading dynamics, consolidating near 1.3275 and local lows of September 20.
Technical factors support the US currency after a noticeable decline at the end of last week due to the publication of statistics on consumer inflation from the US for October: the indicator corrected by 7.7%, below the forecasts for a reduction from 8.2% to 8.0%, which increased the risks that the US Federal Reserve will slow down the pace of monetary tightening starting from the December meeting. Only about 20% of analysts expect interest rates to rise by 75.0 basis points, while most forecasts converge around 50.0 basis points.
Currently, market activity remains rather low, as no key macroeconomic publications are scheduled at the beginning of the week. October statistics on consumer inflation in Canada will be released on Wednesday: forecasts suggest that consumer prices will rise from 6.9% to 7.0% YoY and from 0.1% to 0.8% MoM. The core inflation index from the Bank of Canada may accelerate from 0.4% to 0.7% YoY and from 6.0% to 6.3% MoM.
On the daily chart, Bollinger Bands are steadily declining: the price range is expanding but not as fast as the “bearish” activity develops. MACD falls, keeping a strong sell signal (the histogram is below the signal line). Stochastic reversed downwards again and is close to its lows, indicating that the US dollar may become oversold in the ultra-short term.
Resistance levels: 1.3300, 1.3356, 1.3440, 1.3500. | Support levels: 1.3226, 1.3150, 1.3050, 1.2950.