• USD/CAD edged higher on Tuesday as Canada’s inflation data suggested the BoC might align with a potential significant interest rate cut by the Federal Reserve.
• Canada's annual inflation rate slowed to 2% in August from 2.5% in July, matching the BoC's inflation target and marking the coolest pace since February 2021.
• Investors see roughly 100 basis points of easing in total in the final three BoC meetings of 2024.
•The focus remains on Wednesday's U.S. Federal Reserve policy decision which could see it deliver a big interest rate cut.
• Immediate resistance is located at 1.3634(50%fib), any close above will push the pair towards 1.3683(61.8%fib).
• Support is seen at 1.3575(38.2%fib) and break below could take the pair towards 1.3506( (23.6%fib).
Recommendation: Good to buy around 1.3580, with stop loss of 1.3520 and target price of 1.3680
