USD/CAD Aims At 1.3400, Canadian CPI …
- The Canadian inflation figures should move the rate.
- The bias is bearish despite minor rebounds.
- The lower median line (LML) represents a significant target.
The USD/CAD price extended its sell-off and now trades at 1.3445. The downside pressure is high, so more declines are on the cards.
The greenback lost significant ground versus its rivals as the Dollar Index turned to the downside. Yesterday, the Canadian Housing Starts came in at 253K versus 257K expected. IPPI reported a 1.3% growth, beating the 0.5% growth estimated, while RMPI disappointed.
On the other hand, the US NAHB Housing Market Index and TIC Long-Term Purchases reported poor data.
Today, the Canadian inflation figures should shake the markets. The Consumer Price Index may report a 0.2% growth compared to the 0.6% growth in the previous reported period.
Furthermore, the Core CPI, Median CPI, Common CPI, and Trimmed CPI data will also be released.
Also, the US data could have an impact as well. Building Permits could remain steady at 1.44M, while Housing Starts could drop to 1.44M from 1.45M. Only better-than-expected data could save the USD from the downside.
The FED is expected to keep the Federal Funds Rate at 5.50% tomorrow. Still, the FOMC Press Conference, FOMC Statement, and FOMC Economic Projections could change the sentiment.
USD/CAD Price Technical Analysis: Sell-off
From the technical point of view, the USD/CAD pair accelerated its sell-off after taking out the 1.3500 psychological level and stabilizing below the median line (ml).
It has ignored the weekly S1 of 1.3460 and seems determined to hit new lows. The S2 (1.3410) stands as the next potential downside target.
Also, the lower median line (LML) represents a key target if the rate continues to drop. Despite minor rebounds, the valid breakdown below the median line (ml) signaled more declines.
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