USD/CAD Price Analysis: Trades in tight range above 1.3600 ahead of US Inflation

• 
  USD/CAD
  stays
  sideways
  near
  1.3600
  with
  US
  inflation
  in
  focus.
• 
  The
  core
  CPI
  is
  estimated
  to
  have
  grown
  steadily
  by
  3.4%
  on
  monthly
  as
  well
  as
  annual
  basis.
• 
  Easing
  Canadian
  labor
  market
  conditions
  boost
  BoC’s
  rate-cut
  prospects.

The
USD/CAD
pair
consolidates
in
a
tight
range
above
the
round-level
support
of
1.3600
in
Thursday’s
European
session.
The
Loonie
asset
turns
sideways
as
investors
await
the

United
States
(US)
consumer
inflation
data
for
June,
which
will
be
published
at
12:30
GMT.

The
US

Consumer
Price
Index
(CPI)
report
is
expected
to
show
that
annual
and
monthly
core
inflation,
which
excludes
volatile
food
and
energy
prices,
grew
steadily
by
3.4%
and
0.2%,
respectively.
Annual
headline
inflation
is
estimated
to
have
decelerated
to
3.1%
from
3.3%
in
May.

The
inflation
data
will
exhibit
the
strength
in
the
market
speculation
for
the

Federal
Reserve
(Fed)
to
begin
reducing
interest
rates
from
the
September
meeting.
Ahead
of
the
US
inflation
data,
the
US
Dollar
Index
(DXY),
which
tracks
the
Greenback’s
value
against
six
major
currencies,
remains
on
the
backfoot
around
105.00.

Meanwhile,
the
Canadian
Dollar
is
under
pressure
amid
growing
speculation
that
the
Bank
of
Canada
(BoE)
will
deliver
subsequent
rate
cuts.
Deteriorating
Canadian
labor
market
conditions
have
boosted
expectations
of
more
rate
cuts
by
the
BoE.

USD/CAD
exhibits
a
sheer
volatility
contraction,
trading
in
a
limited
range
of
1.3600-1.3780
for
more
than
two
months.
A
volatility
contraction
suggests
lower
volume
and
small
ticks,
while
a
breakout
in
the
same
results
in
wider
ticks
and
heavy
volume.

The
asset
trades
below
the
20-day
Exponential
Moving
Average
(EMA)
near
1.3663,
suggesting
that
the
near-term

outlook
is
bearish.

The
14-period
Relative
Strength
Index
(RSI)
oscillates
inside
the
40.00-60.00
range,
indicating
indecisiveness
among
market
participants.

A
decisive
breakdown
below
May
3
low
around
1.3600
will
expose
the
asset
to
April
9
low
around
1.3547
and
the
psychological
support
of
1.3500.

On
the
flip
side,
a
fresh
buying
opportunity
would
emerge
if
the
asset
breaks
above
June
11
high
near
1.3800.
This
would
drive
the
asset
towards
April
17
high
at
1.3838,
followed
by
1
November
2023
high
at
1.3900.

USD/CAD
daily
chart