The Canadian dollar failed to show any strengthening as Canadian inflation data published in the New York session yesterday recorded encouraging readings.
Canada's annual consumer price index (CPI) for July rose 3.3% from 2.8% and the monthly CPI reading also rose.
However, the CAD currency failed to rise due to the impact of the drop in crude oil prices in the market.
The global crude oil market is facing risks following the current economic turmoil in China, which has led to an expected decline in demand.
On the price chart of the USD/CAD currency pair, the price is still showing a modest upward pattern until reaching back to the 1.35000 high level.
The Canadian dollar which failed to strengthen, and the US dollar which still managed to maintain its strength, pushed the upward price pattern.
The price retested the 1.35000 level which is an important resistance and was also tested on August 8 trading but failed to break through it.
Continuing trading today (Wednesday), the price is slowly flat at the 1.35000 level since the Asian session until the opening of the European session.
The price movement that remains above the Moving Average 50 (MA50) support level on the 1-hour time frame on the USD/CAD chart continues to give a bullish signal, but the price needs to break through the 1.35000 resistance first to continue the next increase.
If it succeeds in passing it, the price increase will go to the 1.36500 zone which is the resistance once tested by the price last June.
However, if the price fails to break through the 1.35000 resistance, the price decline could happen again and a break through the MA50 support would be an early signal for a bearish move.
The initial drop in price is seen to be heading towards the 1.34000 level before extending further down to a lower level around 1.33000.
