USD/CAD aims for 1.3400, Canadian CPI…
- Canadian inflation data should move interest rates.
- Despite the slight pullback, the bias is bearish.
- The lower median line (LML) represents the critical target.
USD/CAD price extended its decline and is currently trading at 1.3445. Downside pressure is high, so further declines are expected.
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The dollar fell sharply against its rivals as the dollar index turned lower. Yesterday’s housing starts in Canada were 253,000, compared to expectations of 257,000. The IPPI reported 1.3% growth, beating expectations for 0.5% growth, while the RMPI disappointed.
Meanwhile, the US NAHB Housing Market Index and TIC Long-term Purchase Index reported poor data.
Canada’s inflation numbers should shake up markets today. The consumer price index is likely to report an increase of 0.2% compared to his 0.6% growth in the previous reporting period.
In addition, core CPI, median CPI, common CPI, and trimmed CPI data will also be published.
U.S. data may also have an impact. The number of building permits will remain unchanged at 1.44 million, while the number of housing starts may decline from 1.45 million to 1.44 million. Only better-than-expected data can save the US dollar’s downside.
The Fed is expected to keep the federal funds rate unchanged at 5.50% tomorrow. Still, sentiment could change based on FOMC press conferences, FOMC statements, and FOMC economic forecasts.
USD/CAD Price Technical Analysis: Sell
From a technical point of view, US dollar/Canadian dollar The pair accelerated selling after removing the psychological level at 1.3500 and stabilizing below the median line (ml).
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It seems that the price is determined to ignore the weekly S1 level of 1.3460 and set a new low. S2 (1.3410) is the next potential downside target.
Additionally, the Lower Median Line (LML) represents the primary target if interest rates continue to fall. Despite a slight rebound, an effective breakdown below the median line (ml) indicates further decline.
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