USD/CAD stays in range near 1.31 amid muted reaction to PCE data

• Annual core PCE inflation stays unchanged at 2%.  
• US Dollar Index clings to small gains above 96.50.
• WTI fails to break above $68.

The USD/CAD pair continues to trade in its tight 30-pip range on Monday as the PCE inflation data from the United States fail to provide a directional clue. As of writing, the pair was virtually unchanged on a daily basis at 1.3105.

According to the U.S. Bureau of Economic Analysis, the PCE price index rose 0.1% and 2% on a monthly and yearly basis, respectively. Further details of the publication revealed that personal spending increased 0.4% in the same period to match the market consensus while personal income growth eased to 0.2% from 0.4% compared to analysts’ estimate of 0.3%. Following the data, the US Dollar Index rose slightly and was last seen up 0.35% at 96.65.  Chicago Fed President Evans’ speech later in the hour will be looked upon for fresh impetus.  

• US: Annual core PCE price index stays steady at 2% in Sep to match expectations.

Meanwhile, crude oil is also fluctuating in a narrow band and not providing any directional clues to the commodity-sensitive loonie. After advancing to the $68 mark earlier in the day, the barrel of West Texas Intermediate lost its momentum and dropped into the negative territory. At the moment, the WTI is down 50 cents at $67.20.

Technical levels to consider

The pair could face the first technical support at 1.3050 (100-DMA) ahead of 1.3000 (psychological level) and 1.2930 (Oct. 17 low). On the upside, resistances are located at 1.3160 (Oct. 26 high), 1.3200 (psychological level) and 1.3225 (Sep. 6 high).