Choppy Session On USD/CAD – Inflation Figures Up Next!
The Loonie is consolidating in a narrow trading range of $1.2895 – $1.2930 as investors await the Canadian Inflation rate announcement. Considering the importance of Inflation, USD/CAD may offer us some nice trading opportunities. Check out the potential trades…
Fundamental Outlook
Statistics Canada will release the inflation data at 12:30 (GMT) with a forecast to drop to 0.4% vs. 0.7% previously. If this happens, the Bank of Canada will be forced to keep the monetary policy accommodative by keeping interest rates on hold.
Fundamentally, we may see weakness in the Canadian Dollar. Interestingly, the technicals are also expecting a bullish bias for USD/CAD.
Technical Outlook
First of all, let me draw your attention to the triple top pattern which was providing a solid resistance to the pair near 1.2890. But the trading level is violated and the pair is gaining support at 1.2890.
USD/CAD – Daily Chart
USD/CAD – Daily ChartThe leading indicators are entering the oversold territory and soon we may see a bullish reversal. Lastly, USD/CAD has closed a hammer candle right above 1.2890, making it a stronger buying level.
USD/CAD – Key Trading Levels
Support Resistance
1.2857 1.2976
1.2784 1.3022
1.2738 1.3095
Key Trading Level: 1.2903
USD/CAD – Trading Plan
Investors are advised to keep a closer eye on $1.2890. Above this, the market is likely to remain bullish. Whereas a break below $1.2890 can drive more bears into the market. Let’s wait for the data now.
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