Key Points
- The US Dollar failed to recover and moved below 1.2600 against the Canadian Dollar.
- There is a monster descending channel pattern with resistance at 1.2575 forming on the hourly chart of USDCAD.
- This past Friday in Canada, the Consumer Price Index (CPI) for June 2017 was released by the Statistics Canada.
- The outcome was around the forecast, as the CPI rose 1% in June 2017 (YoY).
USDCAD Technical Analysis
The US Dollar was under a lot of pressure and moved below the 1.2700 and 1.2600 levels against the Canadian Dollar. The USDCAD pair even settle below the 1.2580 support area and the 21 hourly simple moving average.
There is a monster descending channel pattern with resistance at 1.2575 forming on the hourly chart. On the upside, the channel resistance at 1.2575 is also near the 21 hourly simple moving average and the 61.8% Fib retracement level of the last decline from the 1.2609 high to 1.2521 low.
An initial resistance is around the 50% Fib retracement level of the last decline from the 1.2609 high to 1.2521 low at 1.2565. Selling rallies near 1.2570-80 can be considered in the short term.
Canada’s Consumer Price Index
This past Friday in Canada, the Consumer Price Index (CPI) for June 2017 was released by the Statistics Canada. The market was positioned for a rise of around 1% compared with the same month a year ago.
The actual result was around the forecast, as the CPI rose 1% in June 2017. In terms of the monthly change, there was a decline of 0.1%, just as the market expected. The report added that:
Energy prices decreased in the 12 months to June, after increasing in May. At the same time, prices for food rose year over year in June, following a small decline in May.
Overall, the USDCAD pair may continue to decline and could even break the 1.2520 support area in the near term.
