USD/CAD Continues Lower Despite Falling Inflation in Canada
After reversing at 1.31 USD/CAD broke above the resistance zone at 1.38 in late October as the USD was making some solid gains on prospects
After reversing at 1.31 USD/CAD broke above the resistance zone at 1.38 in late October as the USD was making some solid gains on prospects of the FED continuing to raise interest rates further. On the daily chart, the price was heading toward the next resistance zone, close to 1.39, and it breached slightly over 1.3903, but reversed lower and has been making lower highs, with the USD being on a retreat period.
Among the factors that have been keeping the CAD soft are the decline in crude Oil and the slowdown in the Canadian employment data in October. The most recent data fell short of forecasts across the board, with negative statistics in full-time employment and declining wage growth, which will be another positive outcome for the FED.
But, the other side of the pair is now driving, as employment and inflation cool off in the US as well. On the daily chart, we can see that USDCAD is currently consolidating between the significant resistance level of 1.3860 and the major trendline. Price movement has been erratic recently, with no apparent direction, so market investors may wish to wait for the price to respond to important levels before establishing fresh positions.
In comparison to his prior remarks, BoC Governor Macklem offered a less hawkish address during the news conference. The current Canadian CPI fell short of estimates across the board, although underlying inflation indices declined, which pleased the Bank of Canada. CPI for October fell to 3.1% from 3.8% in September, which should keep the CAD soft as well.
Canada October CPI 3.1% Versus 3.2% Expected
- October CPI YoY 3.1% versus 3.2% expected
- September CPI YoY was 3.8%
- CPI MoM in October 0.1% versus 0.1% expected
- September CPI MoM -0.1%
Core measures:
- BOC Core YoY 2.7% versus 2.8% last month
- BOC core MoM 0.3% versus -0.1% last month
- CPI median 3.6% versus 3.8% last month revised to 3.9%
- CPI trim 3.5% versus 3.7% last month
- CPI common 4.2% versus 4.4% last month
USD/CAD Live Chart
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Related Articles
Comments
Sidebar rates
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals