The US Core Consumer Price Index (CPI ex food and energy) for the month of July registered at 0.3%, which was higher than the market estimate of 0.2% and matched the result for the month of June 2019. The main CPI number which factors in food and energy products in its calculation, registered at 0.3%, which was the same as the consensus figure.
The USD had a muted response to the report as the core CPI did not have the required deviation to make it a very tradable news release. However, the USDCAD is up by about 20 pips on the news, while the USDJPY gained 14 pips, but has lost it all back in an instant.
The news release will do very little to change the risk-off market sentiment in the market, which will continue to pressurize the US Dollar in its pairing with the Japanese Yen and Swiss Franc.
The USDCAD is presently testing the R1 pivot resistance at 1.3282. This is also the price level where the upper border of the ascending channel intersects with the R1 pivot line. A break of the 1.3282 price area will pave the way to the next resistance at 1.3313 (previous high of Aug 7 and 8).
Conversely, failure to break 1.3282 will see a re-test of 1.3261 and possibly 1.3229. Potentials for this scenario will be boosted by a surprising drawdown in crude oil inventories tomorrow.Don’t miss a beat! Follow us on Telegram and Twitter.
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