USD/CAD Price Attempting to Regain Above 1.365, Eying CPI

• The Canadian inflation data should bring sharp movements today.
• The FOMC could change the sentiment tomorrow.
• The down channel may represent a bullish formation.

The USD/CAD price dropped in the short term as the USD weakened amid the recent wave of the banking crisis. The pair is trading at 1.3677 at the time of writing, above yesterday’s low of 1.3651.

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Today, the fundamentals should move the rate. The Canadian Consumer Price Index may report a 0.5% growth in February after a 0.5% growth in the previous reporting period. Core CPI, Common CPI, Median CPI, and Trimmed CPI data will also be released. On the other hand, the Existing Home Sales are expected to increase from 4.00M to 4.19M.

Tomorrow, the FOMC should bring sharp movements in all markets, not only on the USD/CAD pair. The Federal Funds Rate is expected to be 5.00% as the FED should deliver a 25-bps hike.

The FOMC Press Conference, FOMC Statement, and FOMC Economic Projections could be decisive. Furthermore, the US will release the Flash Manufacturing PMI and the Flash Services PMI on Friday. Also, the Canadian retail sales figures could have a big impact.

USD/CAD Price Technical Analysis: Down Channel

The USD/CAD pair maintains a bearish bias. However, the pair found support above the 1.3651 former low. It has retested the weekly S1 (1.3650) and has now turned to the upside.

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As you can see on the hourly chart, the price changed little in the short term as the traders were waiting for the Canadian inflation figures before taking action. The price developed a down-channel pattern that could eventually represent a bullish formation.

Testing the 1.3651, registering only false breakdowns below the immediate downside obstacles may announce that the downside movement could be over and that the bulls could take the lead.

I expect sharp movements in both directions after the Canadian inflation, so going long or short is risky before the economic data is released.

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