USDCAD Confirming a New Move Lower? | US CPI and BOC to come
Hi traders, with oil making a solid fightback on Tuesday, this has once again put pressure back on the USDCAD. The price had spent five sessions fighting back after the March decline.
This rally came to a halt this week as buyers failed to get past minor resistance. This then turned into a solid decline yesterday as oil pushed higher and the USD moved lower. Yesterday’s decline looks to have confirmed the LH and set up a new possible lower continuation.
From here, we would like to see sellers continue to push lower with a break of support target one. A new hold in that area is a worry and could suggest seller numbers are not that firm. A break and a new move down to Support Target 2 is the ideal outcome of seeing a lower leg completed.
Data-wise, there’s a bit to come out today. US CPI and BOC rate decision. So far, sellers are on the right track at this point today with new weekly lows, and this could change tonight, depending on what we see hit the market.
US CPI is expected to come in lower, with Y/Y 5.1% and M/M 0.2%. This could maintain the current USD decline helping the odds of the continuation. BOC is expected to hold rates at 4.50%, but it’s the statement that could affect the CAD, will the outlook lean hawkish or dovish? Oil is another factor. If we see oil break above key resistance with a new move higher, this could continue to push this pair lower, but if oil stumbles at resistance, this could give the USDCAD some support and, combined with a negative CPI outlook, could even stall the current push lower.
US CPI data will be released at 10:30 pm AEST, and the BOC rates decision and statement will be released at 12:00 am AEST.
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