USD/CAD Price Analysis: Extends its downside below the 1.3500 area ahead of the Canadian inflation data

• USD/CAD remains on the defensive around 1.3476 ahead of Canadian inflation data.
• The pair holds below the 50- and 100-hour EMAs; Relative Strength Index (RSI) stands in bear territory below 50.
• The key resistance level is seen at the 1.3500-1.3510 region; 1.3470 acts as an initial support level for the pair.

The USD/CAD pair remains under selling pressure below the 1.3500 mark during the early European session on Tuesday. A surge in oil price lift the commodity-linked Loonie against the US Dollar (USD). At the press time, the pair is losing 0.07% on the day to trade at 1.3476. Market players await the Canadian Consumer Price Index for August ahead of the highly-anticipated FOMC monetary policy meeting on Wednesday.

According to the one-hour chart, USD/CAD holds below the 50- and 100-hour Exponential Moving Averages (EMAs) with a downward slope, which supports the sellers for the time being. Additionally, the Relative Strength Index (RSI) stands below 50, activating the bearish momentum for the USD/CAD pair for pair.

The critical resistance level for the pair is seen at the 1.3500-1.3510 region, representing the confluence of the 50-hour EMA, psychological round mark, and the upper boundary of the Bollinger Band. Any follow-through buying above the latter will pave the way to the 100-hour EMA at 1.3520. The additional upside filter to watch is near a high of September 13 at 1.3586, followed by a psychological round figure at 1.3600.

Looking at the downside, the lower limit of Bollonger Band at 1.3470 acts as an initial support level for USD/CAD. A breach below the latter will see a drop to 1.3445 (a low of August 15). Further south, the next downside stop is located near a low of August 11 at 1.3412.

USD/CAD one-hour chart