USD/CAD plunges on superb Canadian data
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USD/CAD plunges on superb Canadian data

All the Canadian inflation and retail sales figures exceeded expectations. Inflation in Canada stands at 1.1% and core inflation at 1.2%, both above predictions. Canadian inflation was expected to drop to 0.9% in February after 1.5% in January. Core inflation was expected to slide to 1.1% from 1.4%. Core Month on month CPI rose by 0.8%. It was expected to rise 0.6% after 0.3% beforehand and core CPI rose by 0.7% more than 0.5% expected after 0.2%.  Canadian retail sales advanced 1.3% contrary to a rise of 0.8% in retail sales in February after a drop of 1.8% in January. Core sales were expected to correct by advancing 0.9% after a drop of 1.4% beforehand but the actual rise was 1%. Everything is better than expected.

USD/CAD traded around 1.1250 towards the publication, bouncing back from the lows. USD/CAD is crashing below 1.12 to a low of 1.1188 in the aftermath. Update: the pair is below 1.1180 now.

The Canadian dollar had a terrible week, falling to multi-year lows. USD/CAD broke above 1.1224, the previous high and peaked at 1.1277, the highest since June 2009. Various factors hit the C$, with the dovish speech of BOC governor Poloz and Yellen’s rate hike comment standing out.

Last month, we have seen how Canadian consumer price index numbers had a stronger impact than retail sales. Now that both are heading in the same positive direction, the loonie also reacts positively and makes a huge correction to its bad week.

1.277 works as resistance and 1.1224 as support. Further support stands at 1.1170. For more, see the C$ forecast.

This is how it looks on the chart:

C$recovering after Canadian inflation retail sales CPI data March 21 2014 technical 30 minutes chart

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.