USDCAD Unchanged as Canadian CPI Data Meets Consensus
The USDCAD is trading virtually unchanged at 1.3139 as the Canadian CPI (monthly) figure came in at -0.1%, which was in line with market expectations. This result was also better than the -0.3% that was registered a month earlier. However, the deviation targets to make this news a tradable one were not met, which is why the pair remains virtually unchanged at current levels.
On an annualized basis, the CPI rose 2.2%, which was higher than the 1.9% that was recorded in the last quarter. An increase in energy prices, which rose 1.5% on an annualized basis (as against the decline of 2.9% annualized figure measured previously), is responsible for the increase in the Canadian CPI figures.
The USDCAD is trading at 1.3139, which is at the lower border of the falling wedge pattern that encapsulates the price action of the last one month. This price levels is also the sight of the horizontal support, formed by previous lows at Feb 28, July 30 and September 10.
If price bounces from this price level, this could take the USDCAD to the immediate upside target at 1.3192 (upper border of the wedge and previous highs of June 26 and July 26, as well as November 1 and December 12). A further upside target exists at 1.33351, with a possible pitstop at 1.32981 (previous cluster of lows in March and April 2019, as well as cluster of highs in Sept 2019). However, price will have to break out of the falling wedge with a definitive 3% penetration to the upside for these upside targets to be attained.
On the flip side, brings 1.30571 into the picture. This is where lows of June 28 and October 14-16 are located. Below this level, continued CAD strength would be required to bring 1.30127 into focus, being the previous lows of July 14-19.