USDCAD continues the sharp correction reaching seven-month lows as the sell-off in USD continues across the majors. Risk-on sentiment continues to support Canadian loonie, as Nasdaq and S&P 500 hit record highs for the second day in a row. Weaker inflation in Canada failed to stop the USDCAD drop.
Canada CPI Below Expectations
Annual Canada, Consumer Price Index, came in at 0.1% below the expectations of 0.5% in July. The monthly Consumer Price Index registered in at 0%, also below the forecasts of 0.4%. The Core Consumer Price Index Core, which excludes food and energy came in at 0.7% below the June reading of 1.1%.
Canada Wholesale Sales came stronger than expected at 18.5% topping the forecasts of 10% in June.
USDCAD Reaction to Canada CPI
USDCAD remains almost unchanged at lower levels after the release of Canada CPI as investors await the main dish of the day, the release of the minutes of the last Fed’s policy meeting.
USDCAD Price Analysis
The USDCAD is 0.15% lower at 1.3146, making fresh seven month lows. The pair continues to trade inside the descending trend channel the drive the pair to lower levels, and now approaches the lower band of the channel, that might provide a bounce. Also, the RSI index is entering the oversold zone, and soon we might experience a rebound.
Initial support for USDCAD is at 1.3133 the daily low. Next support stands at 1.31 round figure, which is the bottom of the trend channel. Below 1.31 more buying interest expected at 1.3037 the low from January 22.
On the upside resistance for the pair is at 1.3175 today’s high. More selling pressure would be met at 1.3271 the high from August 17. A break above1.3271 would open the way for 1.3340 the high from August 11.
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USDCAD Daily Chart
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