The USD/CAD pair falls back to the round-level support of 1.3600 in Monday’s European session. The Loonie asset drops as the US Dollar fails to catch bid despite traders pare expectations for the Federal Reserve (Fed) to begin reducing interest rates from the June meeting.Investors do not see the Fed reducing interest rates in June as strong United States labor market conditions have strengthened the inflation outlook. Strong demand for workers is generally offset by hiring them with higher wages, which propels consumer spending. Eventually, higher consumer spending leads to an increase in the consumer price inflation.Going forward, investors will focus on the Consumer Price Index (CPI) data for March, which will be published on Wednesday. The annual core CPI that strips off volatile food and oil prices is forecasted to have grown at a slightly slower pace of 3.7% from 3.8% in February.Meanwhile, expectations for early rate cuts by the Bank of Canada (BoC) have deepened due to Canada’ weak labor market data. On Friday, the Statistics Canada showed that labor market witnessed drawdown by 2.2K, while investors forecasted fresh recruitment of 25K jobs. The Unemployment Rate rose strongly to 6.1% from expectations of 5.9% and the prior reading of 5.8%. However, annual Average Hourly Earnings grew at a higher pace of 5.0% from 4.9% in February.USD/CAD trades close to the horizontal resistance of the Ascending triangle formation on a daily timeframe, plotted from December 7 high at 1.3620. The upward-sloping border of the aforementioned pattern is placed from December 27 low at 1.3177. The chart pattern exhibits a sharp volatility contraction and a breakout can happen in any direction.The asset remains above the 20-day Exponential Moving Average (EMA) near 1.3520, suggesting that the near-term appeal is bullish.However, the 14-period Relative Strength Index (RSI) oscillates inside the 40.00-60.00 range, indicating indecisiveness among market participants.The Loonie asset would observe a fresh upside if it breaks above April 5 high at 1.3648. This will drive the asset to the round-level resistance of 1.3700, followed by November 22 high at 1.3765.On the flip side, a downside move below February 22 low at 1.3441 would expose the asset to February 9 low at 1.3413. A breakdown below the latter would extend downside towards January 15 low at 1.3382. USD/CAD daily chart
USD/CAD
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