Key Points
- The US Dollar gained a lot against the Canadian dollar lately, and traded above 1.3500.
- There is a bullish trend line formed on the hourly chart of USDCAD, which may act as a support on the downside near 1.3470.
- Recently in Canada, the Consumer Price Index (CPI) was released by the Statistics Canada.
- The result was on the lower side, as there was a decline of 0.4% in Nov 2016, compared with the forecast of -0.2%.
USDCAD Technical Analysis
The US Dollar managed to gain a lot of strength against the Canadian dollar recently, and traded above 1.3500. The USDCAD pair traded as high as 1.3523 before the pair started correcting lower towards a bullish trend line formed on the hourly chart at 1.3480-70.
The pair is currently testing the 23.6% Fib retracement level of the last wave from the 1.3421 low to 1.3523 high, which is acting as a support.
If the pair dips from the current levels, then it may find support near 1.3480, which is around the trend line. One may consider buying with a stop below the trend line.
Canadian Consumer Price Index
Recently in Canada, the Consumer Price Index (CPI), which is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services was released by the Statistics Canada. The market was positioned for a decline of 0.2% in Nov 2016, compared with the previous month.
However, the result was on the lower side, as there was a decline of 0.4% in Nov 2016. The report added that the “transportation index rose 1.4% year over year in November, following a 3.0% gain in October. This deceleration was led by gasoline prices, which declined 1.7% year over year in November after increasing 2.5% in October.”
Overall, the result was disappointing, and may weigh further on the Canadian dollar for a move towards 1.3500-20 vs the USD.
