Trade USDCAD on the Canadian CPI Data

Currencies have been moving hard and fast in the last few sessions and Canadian dollar traders are preparing for more volatility today as some key fundamental data is thrown into the mix. Canadian CPI data is due out early in the New York session today and the Bank of Canada, and indeed the rest of the market will be hoping for a bit of clarity from the numbers. The month-on-month number is expected to show a 0.5% increase whereas the market is expecting the year-on-year figure ticked up to 1.8% and these numbers could prompt the bank to keep rates on hold for a third consecutive time at their next meeting.

USDCAD hit an annual low at 1.3537 last week but has jumped on the back of a dollar rally and some very sharp moves in the Oil market. It’s not sitting in mid-range poised for a potential move either side if we see a significant deviation in the data from expectations. Anything stronger should see some good Cad buying and may push the pair lower towards the 200 Day Moving Average and the recent low with a weaker print likely to push it higher towards last nights top at 1.3798 and the Hourly trendline resistance further up. Traders will be aware that Fed Chair Jerome Powell is speaking a couple of hours after the data drops but there should be good trading opportunities for the pair before any influence on the dollar side of the trade.

Resistance 2: 1.3870 – Trendline Resistance

Resistance 1: 1.3798 – Overnight High

Support 1: 1.3661 – 200 Day Moving Average

Support 2: 1.3537 – Annual Low and Trendline Support

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