USDCAD: Loonie Strengthens After Solid CPI Print

17 / 08 / 2018

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The Canadian dollar strengthened on Friday and was trading 0.60% higher during the US session, with the USDCAD pair trading at one week lows around 1.3080.

Canadian inflation unexpectedly picked up in July and rose to 3.0% year-on-year from 2.5%, while analysts had expected inflation to stay unchanged at 2.5%. Core inflation also ticked higher from 1.3% to 1.6% on the yearly basis. The Canadian dollar surged around 100 pips after these numbers.

The US University of Michigan consumer confidence gauge dropped from 97.9 to 95.3, but on the other hand, inflation expectations stayed unchanged at 2.9%.

The USDCAD pair fell below the short-term bullish trend line, which cancelled the immediate bullish trend. The first resistance for the next hours is seen at the broken trend line at 1.3120. If the greenback manages to get back above, further rise toward the current cycle highs of 1.3160 could occur.

The support is currently located around 1.3050 and if the Loonie strengthens below, further decline of the USDCAD pair toward the psychological level of 1.30.