The USD/CAD price analysis shows mild bullish momentum as the Canadian dollar remains fragile after softer-than-expected inflation data. At the same time, the dollar was steady as sales data pointed to a gradual start to Fed rate cuts.Data on Tuesday showed that inflation fell by 0.2% monthly, surprising economists who had forecast no change. Inflation in Canada has consistently fallen, reaching the Bank of Canada’s target. As a result, experts believe the central bank might increase the size of future rate cuts. Consequently, the Canadian dollar might come under pressure, allowing USD/CAD to climb. However, the dollar’s upside potential is also low since the Fed is preparing to start lowering borrowing costs. The dollar increased on Tuesday after data revealed that US retail sales unexpectedly increased by 0.1%. Economists had expected sales to drop by 0.2%. The upbeat report briefly boosted the dollar, supporting the case for a small Fed rate cut on Wednesday. Nevertheless, the likelihood of a 50-bps cut remains higher at 63%. Market expectations shifted towards the end of last week when news outlets indicated a high probability of a massive Fed rate cut. Furthermore, market participants will focus on the messaging for future moves during the policy meeting. A dovish outlook could weigh on the dollar. On the other hand, a small rate cut and a cautious outlook for the future might boost the greenback. USD/CAD key events today

 USD/CAD technical price analysis: Bulls attempting a consolidation breakout USD/CAD 4-hour chartOn the technical side, the USD/CAD price has remained in its tight range, slightly below the 1.3600 critical level. Although bulls are in the lead, they are not committed to pushing the price far above the SMA. This is a sign of indecision or a pause due to exhaustion. The price sits slightly above the SMA with the RSI above 50. Therefore, the indicators support bulls. A surge in momentum might push USD/CAD above the 1.3600 resistance level. A break above this level would clear the path for the price to retest the 1.3701 resistance level. More By This Author:EUR/USD Outlook: ECB Unclear On Rate Cuts, Eyes On FOMC
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