The USDCAD traded lower through the trading session yesterday as the DXY continued to weaken. The price reversed from the 1.3745 resistance level, down toward the key support level of 1.3650.
Today, the Canadian CPI is due to be released and is expected to indicate a slowdown in overall inflation growth with the Median CPI y/y (Forecast: 4.8% Previous: 5.0%) and the Trimmed CPI y/y (Forecast: 4.9% Previous: 5.1%).
Recently the Bank of Canada paused on its rate hikes, to allow time for the effects of the previous rate hikes to be reflected.
A slowdown in inflation growth would be supportive of their recent decision to pause and could reinforce a continuation of the decision. This could result in some strengthening of the Canadian dollar.
The USDCAD is likely to retrace to test the 1.37 round number level and 50% Fibonacci retracement level. However, if the USDCAD breaks below 1.3650, the next key support level would be at 1.3560.
Today, the Canadian CPI is due to be released and is expected to indicate a slowdown in overall inflation growth with the Median CPI y/y (Forecast: 4.8% Previous: 5.0%) and the Trimmed CPI y/y (Forecast: 4.9% Previous: 5.1%).
Recently the Bank of Canada paused on its rate hikes, to allow time for the effects of the previous rate hikes to be reflected.
A slowdown in inflation growth would be supportive of their recent decision to pause and could reinforce a continuation of the decision. This could result in some strengthening of the Canadian dollar.
The USDCAD is likely to retrace to test the 1.37 round number level and 50% Fibonacci retracement level. However, if the USDCAD breaks below 1.3650, the next key support level would be at 1.3560.
