- The USD/CAD pair maintains a bearish bias as long as it stays within the downtrend channel pattern.
- A new lower low activates more declines.
- The Canadian inflation data and the US retail sales figures could shake the markets.
The USD/CAD price ranges in the short run as the traders wait for the Canadian inflation data before taking action. The price continues to stay bearish after the US reported mixed data yesterday.
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The PPI and Core PPI came in worse than expected, while the Empire State Manufacturing Index was reported at 4.5 points versus the -6.1 points estimated.
Today, the fundamentals should drive the rate. The Canadian Consumer Price Index is expected to register a 0.8% growth in October versus the 0.1% growth reported in September. In addition, the Core CPI, Median CPI, Trimmed CPI, and Common CPI indicators will also be released.
On the other hand, the US is also releasing high-impact data. The Retail Sales indicator is expected to report a 1.0% growth versus the 0.0% growth in September, while Core Retail Sales may register a 0.5% growth.
Furthermore, the Import Prices, Capacity Utilization Rate, Industrial Production, and Business Inventories data will also be released.
USD/CAD price technical analysis: Ranging pattern
Technically, the rate dropped within a downtrend channel pattern. It almost reached the 1.3223 historical level, which represents static support. The bias remains bearish as long as it stays below the downtrend line. I’ve drawn an ascending pitchfork, hoping to catch a new bullish momentum. The lower median line (LML) acts as a dynamic support. The USD/CAD pair registered only a false breakdown through this line signaling exhausted sellers.
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In the short term, the price could extend its range. Still, the Canadian and US data could bring sharp movements. A new lower low, making a valid breakdown below 1.3223, opens the door for more declines. On the contrary, a new leg higher could be confirmed only after a valid breakout through the downtrend line. False breakouts in one direction could announce a valid breakdown in the opposite direction.
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