USD/CAD In Rotation Following CPI
Shain Vernier • 1 min read
Today’s market fundamentals have influenced trade of the USD/CAD dramatically. The completion of rollover to March WTI crude oil futures and the release of Canadian CPI numbers have brought participation to the Loonie. Unfortunately, it looks like the bulls and bears have fought to a relative stalemate.
In a Live Market Update from yesterday, I outlined potentially hot trading conditions facing the USD/CAD for the Friday forex session. This assertion has been categorically false as lagging CPI and a rally in WTI have largely offset one another. For the moment, this market has posted a modest 52 pip daily range, tilted slightly to the bear.
On the technical front, not much has changed for the USD/CAD all week long. Rates are in a rotational phase between 1.3300 and 1.3250. Until we see a break from this area, the pronounced “L” formation on the daily chart will continue.
Here are two levels to watch for next week’s trade:
- Resistance(1): 38% Current Wave Retracement, 1.3366
- Support(1): December Low, 1.3159
Overview: During the U.S. session pre-market hours, Canadian CPI was released to the public. On a year-over-year basis, both the Statistics Canada and Bank Of Canada (BoC) figures showed gains. However, the monthly numbers for December were not as encouraging, with the BoC Core CPI (-0.2%) and Statistics Canada CPI (-0.1%) both coming in negative.
All in all, today has been a relative disappointment for the USD/CAD. Fundamentals have brought participation to the market, but the tug-of-war is resulting in a draw. Perhaps a directional move will come to pass next week for the Loonie.