• The Canadian dollar is under heavy pressure following Tuesday’s loss of 1.36%.
• The US August inflation report augmented demand for safe-haven assets and underpinned the US dollar.
• USD/CAD Price Analysis: To re-test the YTD high in the short-term; otherwise, a fall toward 1.3000 is on the cards.

On Tuesday, the USD/CAD edges higher following the release of US inflation figures, which exceeded estimations, further cementing the Federal Reserve’s case for a 75 bps rate hike. At the time of writing, the USD/CAD is trading at 1.3167, above its opening price, after hitting a weekly during Tuesday’s session at 1.3175.

USD/CAD Price Analysis: Technical outlook

During the Tuesday session, the USD/CAD bounced off the 50-day EMA at 1.2958, where it hit Tuesday’s daily low, and never looked back, reclaiming on its way north, the 20-day EMA at 1.3059, and the 1.3100 figure. Therefore, the USD/CAD resumed its upward trend, further confirmed by the Relative Strength Index (RSI) crossing above its 7-day SMA, signaling buyers are in charge.

Short term, on the four-hour scale, the USD/CAD could challenge the YTD high at 1.3208. Once it’s cleared, the next supply zone would be the R1 daily pivot at 1..3242, followed by the psychological 1.3300 mark., and then the R2 pivot point at 1.3321.

On the other hand, if the USD/CAD tumbles below the daily pivot at 1.3100, that could pave the way for further losses. The USD/CAD first support would be the S1 pivot at 1.3020, followed by the 1.3000 figure, and then the 200-EMA at 1.2962.

USD/CAD Key Technical Levels