There was a retracement on the USD/CAD currency pair chart in early trading yesterday after the surge exhibited at the end of last week.
The US dollar was still moving gloomy on Monday yesterday following a significant fall last week which was affected by the release of the United States (US) inflation data which decreased.
The movement of the US dollar is expected to be volatile throughout this week pending the outcome of the FOMC meeting next week.
The Canadian dollar will be waiting for the inflation data in the New York session tonight, with the latest figures predicted to decrease further due to the central bank of Canada (BOC) also continuing to raise interest rates at the latest meeting.
USD/CAD showed a decline from the beginning of last week until reaching the 1.31000 level, but bounced back higher on Friday, at the close of the last session of the week.
The price that surged past the Moving Average 50 (MA50) level on the 1-hour time frame on the chart reached a height of around 1.32300 which was the price area of horizontal movement in trading at the opening of the week yesterday.
However, a downward pattern is shown until the price drops to the 1.31600 level. The price bounced back after testing the MA50 support level.
Resuming trading today (Tuesday), prices hovered slowly below the 1.32000 level as the market awaited the release of Canadian inflation data tonight.
If the price makes an increase above the 1.32000 level, yesterday's early week high is likely to be overcome before the price continues to rise higher.
The target for the next increase in price is towards the level of 1.33000 which will become a resistance again before the price that succeeds in extending the increase will reach the 1.34000 zone.
However, if the price pulls back down from the current level of 1.32000, the support level reached at the end of last week at 1.31000 will come into focus once again.
If the price breaks below the support level, the price is seen to go towards the 1.3000 level which has the potential to be the latest support level.
