- USD/CAD trades sideways around 1.3570 ahead of the US and Canada economic data.
- The BoC may shift to rate cuts early if the Canadian Q4 GDP turns out weaker than expectations.
- The Loonie asset hovers around the horizontal resistance of the Ascending Triangle formation.
The USD/CAD pair is stuck in a tight range around 1.3570 in the European session on Thursday. The Loonie asset awaits the United States core Personal Consumption Expenditure Price Index (PCE) and the Canadian Q4 Gross Domestic Product (GDP) data for fresh guidance, both will be published at 13:30 GMT.
The US Dollar Index turns subdued ahead of the crucial US inflation data. The monthly core PCE Price Index data is anticipated to have grown by 0.4% in January against 0.2% increase in December. The annual underlying inflation data is forecasted to have grown at a slower pace of 2.8% vs. 2.9% growth in December.
On the Canadian Dollar front, the monthly GDP data for December is expected to have grown at a steady pace of 0.2%. The Bank of Canada (BoJ) projected earlier that the growth rate in the last quarter of 2023 will be flat. Weak GDP growth would deepen hopes of early rate cuts by the Bank of Canada (BoC).
USD/CAD aims to deliver a breakout of the Ascending Triangle chart pattern formed on a daily timeframe. The asset hovers around the horizontal resistance of the aforementioned pattern plotted from December 13 high at 1.3608, while the upward-sloping border is placed from December 29 low at 1.3178.
The near-term demand is upbeat as the pair is holding above the 50-day Exponential Moving Average (EMA), which trades around 1.3487.
The 14-period Relative Strength Index (RSI) climbs above 60.00, indicating that momentum leans toward the upside.
Fresh upside would appear if the asset breaks above December 13 high at 1.3608, which will drive the asset towards November 15 low at 1.3655, followed by the round-level resistance of 1.3700
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