An interesting day of trading for the USD/CAD awaits traders, this as Consumer Price Index statistics are set to come from Canada. Once again the USD/CAD is continuing to test its lower price values, but the current value of the Forex pair is near the 1.32100 level as of this writing, and it is a price that was also seen around the 20th and 21st of June. While outliers certainly have been seen the past month of USD/CAD trading, a price range around 1.31150 to 1.33000 has essentially proven a testing ground.
Inflation Data from Canada Today will stir the USD/CAD
Economic data from Canada continues to produce mixed signals which are also causing a rather consolidated trading range in the USD/CAD, but one that is near its lows when a long-term chart is given perspective. The CPI numbers from Canada today are expected to show inflation remains stubborn. If the numbers come in higher than expected, this could actually cause a rather odd reaction in the USD/CAD and ignite some selling of the currency pair. There are no guarantees, but a higher inflation rate may make financial institutions believe the Bank of Canada could be forced to be more aggressive long-term compared to the U.S Federal Reserve.
The USD/CAD has correlated to the Broad Forex Market
- On Friday of last week the USD/CAD did briefly penetrate its ‘known’ monthly range when a low of nearly 1.30900 was tested momentarily.
- The move lower in the USD/CAD late last week from Wednesday until now has correlated to the broad Forex market.
- Resistance levels which are close at 1.32250 should be monitored, if the USD/CAD can maintain a lower price stance this may indicate behavioral sentiment exists which may want to test lower realms in the currency pair again.
The USD/CAD is certainly near its lower long-term price ratios, but the 1.31000 mark has proven durable for a while. The last time the USD/CAD saw sustained trading below this level was in September of 2022. The U.S Federal Reserve is expected to raise its Federal Funds Rate on the 26th of July. If Canadian CPI numbers are stronger than anticipated today, this may cause momentary volatility, but it might also spark speculative selling in the USD/CAD. The 1.32000 level in early trading today should be watched. Speculators need to be careful with the USD/CAD in the short-term, and nervous traders may want to sit on the sidelines until the inflation data is published.
Canadian Dollar Short Term Outlook:
Current Resistance: 1.32200
Current Support: 1.32010
High Target: 1.32540
Low Target: 1.31520
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