Selling USD/CAD, After the Canadian Inflation Report
Skerdian Meta•Wednesday, May 19, 2021•1 min read
[[USD/CAD-sponsored]]
USD/CAD has been on a strong bearish trend for more than a year, since the USD started turning bearish last March. This pair has lost more than 26 cents from top to bottom, but we saw a pullback higher earlier this year. By the end of the April the retrace ended and the bearish trend resumed again.
We have been selling the retraces higher during the decline against moving averages, which have been great selling indicators. Today, we saw another pullback higher, but the 50 SMA (yellow) is acting as resistance on the H4 chart again, so we decided to open another sell signal. The CAnadian inflation report was released a while ago and it was another positive one, which should help the CAD further
Canada CPI for April 2020
- CPI MoM April 0.5% versus 0.2% estimated
- March CPI was 0.5%
- Core CPI MoM 0.5% versus 0.3% previous
- CPI YoY 3.4% versus 3.1% estimated
- Highest year-over-year reading since May 2011
- Full report
Core measures:
- Core CPI common year on year 1.7% versus 1.7% estimate
- Core median YoY 2.3% versus 2.1% estimate
- Core trimmed 2.3% versus 2.2% estimate
That’s two months in a row of 0.5% increases. That’s a hefty pace the will quickly get far above the BOC target. USD/CAD dipped on the headline but the market is suddenly in a very skeptical mood regarding inflation. Plus, there’s a deeper negative tone in markets that’s hurting the loonie and other commodity currencies.
There are also some skews in the report. Transportation prices rose 9.4% as gasoline prices jumped and people began booking travel again. The y/y rise in gasoline prices was 62.5% — the highest on record.
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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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