The USD/CAD reacted to yesterday’s U.S CPI data with a run higher, but then eventually came back to values which had been on Friday of last week and this Monday.

  • The USD/CAD is trading near the 1.34950 ratio as of this writing, while continuing to show a rather healthy range as financial institutions continue to react to mixed economic data from a variety of sources.
  • Yesterday’s Consumer Price Index data from the U.S came in slightly higher than expected via core monthly result and annual broad statistics, meaning inflation remains stubborn, yet the numbers weren’t wildly wrong.

    • The USD/CAD had been trading at a low of nearly 1.34695 when the CPI data was released and in the span of one hour was at the 1.35255 ratio. However, what is noteworthy about the low seen before the U.S inflation data was released is that the depth never challenged Friday’s low around the 1.34185 mark. The low on last Friday was a result of folks betting on the jobs numbers which then came in with mixed returns and brought the USD/CAD back to the higher elements of its range. Speculative Behavioral SentimentIt appears that yesterday financial institutions, although they seemed to be leaning towards a weaker USD over the mid-term were not willing to lean into their behavioral sentiment with selling positions as robustly as they had done on Friday. Financial institutions understand inflation remain problematic in North America and other spheres, while the USD/CAD did see volatility it must be acknowledged it also remains in a rather steady price range.On the 16th of January this year the USD/CAD was essentially trading near its current value. The currency pair has certainly seen volatility, but in many respects the USD/CAD also has found equilibrium as financial institutions continue to wait for change in central bank rhetoric. Yesterday’s U.S inflation data is not going to change the pronouncements however; inflation remains a sticky issue for the U.S Federal Reserve just like it does for the Bank of Canada.  More U.S Data and the Potential of Speculative Range OpportunitiesTraders who want to pursue the USD/CAD may want to remain technically inclined. Trading the data results via inflation reports has become dangerous, particularly for speculators who are placing orders before the releases are made public. Tomorrow more inflation data will come from the U.S from the Producer Price Index numbers, also Retail Sales will be released. Until then the range of the USD/CAD may remain wide enough to try and wager on technical support and resistance levels.

  • The past week of trading has seen the 1.35000 ratio act as a rather solid focal point in the USD/CAD.
  • Yesterday’s high around the 1.35250 mark caused a reversal lower and has not been re-challenged. Support for the USD/CAD may prove interesting around the 1.34850 mark in the near-term.

    •  Canadian Dollar Short Term Outlook:

  • Current Resistance: 1.35010
  • Current Support: 1.34910
  • High Target: 1.35150
  • Low Target: 1.34840

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