The bullish price movement on the chart of the USD/CAD currency pair did not continue at the beginning of the week yesterday as the market saw the US dollar trading gloomy.
Market sentiment still remains uncertain and fails to provide a clear direction for price movements, but the New York manufacturing index data published yesterday declined has pushed the US dollar lower.
When starting trading at the opening of the Asian session around 1.35600, the bullish pattern did not continue, instead the price showed a drop below the 1.35000 zone.
The drop of 100 pips which reached around 1.34600 was also seen passing the Moving Average 50 (MA50) support on the 1-hour time frame on the USD/CAD chart signaling a change to a bearish trend.
However, the price increase pattern is displayed again today (Tuesday) heading back to the 1.35000 zone.
Investors will be cautiously awaiting Canada's consumer price index (CPI) data which will show the current rate of inflation in the country.
This inflation data is expected to have a big impact on the movement of the Loonie as it will be an indicator for the Bank of Canada (BOC) in setting their monetary policy hereafter.
For the expectation that if the price increase manages to jump back past the 1.35000 zone and the MA50 barrier, the bullish pattern of last week is likely to continue again.
The continued rise is seen to lead to the target zone at the height of 1.36500.
However if the price tests the 1.35000 zone but fails to break through it, a further decline could occur.
The price will go to the 1.34000 level first before continuing further decline to the 1.33000 support zone.
