• USD/CAD edged higher but gains were limited as investors adopted a cautious stance ahead of crucial economic reports.
• Investors are turning their focus to the upcoming consumer price index (CPI) reports from both Canada and the United States this week, which will serve as key indicators of inflation trends .
•With both the Bank of Canada and the U.S. Federal Reserve set to announce their policy decisions within days, any upside surprise in inflation could temper hopes for near-term rate cuts, while softer readings might reinforce expectations of a more dovish stance.
• Monday's economic data showed that producer prices in Canada increased 0.8% in September from August, following a downwardly revised 0.2% increase in August.
• Technical highlight upside risks for USD/CAD, with momentum studies, 5, 10 and 11 DMAs tracking north.
• Immediate resistance is located at 1.4070(23.6%fib), any close above will push the pair towards 1.4110(Higher BB).
• Support is seen at 1.3976 (SMA 20) and break below could take the pair towards 1.3942 (38.2%fib).
Recommendation: Good to buy around 1.4010, with stop loss of 1.3950 and target price of 1.4100
