{"id":440380,"date":"2026-10-19T21:40:16","date_gmt":"2026-10-19T14:40:16","guid":{"rendered":"https:\/\/www.swingfish.trade\/blog\/market-news\/usdcad-bounces-after-softer-cpi-data-but-they-have-work-to-do-440380\/"},"modified":"2026-10-19T21:40:16","modified_gmt":"2026-10-19T14:40:16","slug":"usdcad-bounces-after-softer-cpi-data-but-they-have-work-to-do","status":"publish","type":"post","link":"https:\/\/www.swingfish.trade\/blog\/market-news\/usdcad-bounces-after-softer-cpi-data-but-they-have-work-to-do-440380\/","title":{"rendered":"USDCAD bounces after softer CPI data but they have work to do."},"content":{"rendered":"
\n

Canada\u2019s September CPI report gave traders a little something on both sides of the inflation debate.<\/p>\n

Headline inflation rose to 3.1% year over year from 3.0% in August, but came in below expectations of 3.2%. Meanwhile, inflation excluding gasoline slowed to 2.2% from 2.4%.<\/p>\n

Energy remains the problem area. Gasoline prices increased 27.8% from a year earlier, while fuel oil and other fuels surged 57.8%, with a greater impact on households in Atlantic Canada. Shelter inflation also accelerated, although rent growth held steady and mortgage interest costs continued to decline.<\/p>\n

The better news came from groceries. Annual inflation slowed to 1.7%, the lowest since May 2024, with fresh vegetables and sugar and confectionery prices declining from a year earlier. That is welcome relief, but slower inflation does not undo the earlier increases. Grocery prices remain 33.0% above September 2020 levels.<\/p>\n

What does it mean for the Bank of Canada?<\/p>\n

The headline moved higher, but energy drove the acceleration. The question for the Bank of Canada is whether those higher costs spread into other prices.<\/p>\n

Slower inflation excluding gasoline offers some reassurance. However, the 0.4% seasonally adjusted monthly increase warrants attention.<\/p>\n

For currency traders, higher inflation would normally support Canadian yields and the Canadian dollar, putting downward pressure on USDCAD. The softer-than-expected headline and slower non-gasoline inflation temper that argument.<\/p>\n

So, what are the technicals telling traders?<\/p>\n

Sellers have control. Can buyers defend 1.4082?<\/p>\n

USDCAD moved lower ahead of the report, reaching a session low of 1.4071. That took the price below the 38.2% retracement at 1.40818 of the rally from the August 21 low to the October highs near 1.42984.<\/p>\n

Following the report, the price recovered to 1.41119, but that bounce faded. The pair is back below 1.4100, trading near 1.4095.<\/p>\n

For buyers, holding above 1.40818 is the first requirement. It gives them a level to lean against and define risk. It does not, by itself, put them in control.<\/p>\n

A move back below that level\u2014and staying below\u2014would keep the sellers firmly in charge. The session low at 1.4071 would come back into focus, followed by the 100-day moving average at 1.40377. The price has not traded below that moving average since September 16.<\/p>\n

Broken support becomes resistance<\/p>\n

On the topside, buyers first need to get above the post-report corrective high near 1.4112.<\/p>\n

Above that sits a more important swing area between 1.41297 and 1.41532. That zone has defined turning points going back to November 2025 and again between June 19 and July 14 this year.<\/p>\n

The price broke above it on September 28. Now that USDCAD is back below, what was support becomes resistance.<\/p>\n

Getting above that area\u2014and staying above\u2014would give buyers a stronger say in the direction.<\/p>\n

Right now, however, they have work to do. Sellers remain in control, and 1.4082 is the short-term barometer. Stay above, and buyers can try to build a recovery. Move below, and the door opens for another shove lower.<\/p>\n

In the video, I walk through the levels that define the risk, the bias, and the next targets for USDCAD.<\/p>\n

This article was written by Greg Michalowski at investinglive.com.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

Canada\u2019s September CPI report gave traders a little something on both sides of the inflation debate. Headline inflation rose to 3.1% year over year from 3.0% in August, but came in below…<\/p>\n","protected":false},"author":216,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[86],"tags":[],"class_list":["post-440380","post","type-post","status-publish","format-standard","hentry","category-market-news"],"_links":{"self":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/440380","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/users\/216"}],"replies":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/comments?post=440380"}],"version-history":[{"count":0,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/440380\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/media?parent=440380"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/categories?post=440380"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/tags?post=440380"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}