Canada’s inflation rate in March was lower than expected and that news sent USDCAD to the top of this week’s range. The Consumer Price Index rose 1.6%, down from February’s 2.0% result and below the 1.8% level which was forecast. USDCAD rose from 1.3468 just before the release to 1.3494 immediately afterwards.
The weaker than expected provides support to Bank of Canada Governor Stephen Poloz’s cautious approach at the last monetary policy press conference.
The overnight session was pretty much a non-event. The majors were choppy but activity was confined to this week’s week-defined ranges. The Paris terrorist attack and uncertainty around the April 23, French election kept traders on the sidelines. The US dollar opened in New York with tiny gains against EUR, GBP, and NZD. It was almost unchanged against CAD and CHF while AUD and JPY inched higher.
EURUSD traders ignored better than expected Eurozone PMI data and sold EURUSD from 1.0736 to 1.0690. concerns that the Paris terrorist attack could affect Sunday’s election results is behind the move.
The UK Retail Sales report was weak. (March Retail Sales -1.8% vs. forecast -0.2%) GBPUSD dropped from 1.2830 to 1.2783
In Asia and Europe, the antipodeans bopped around inside narrow ranges with a AUDUSD getting a bit of support from slightly higher iron ore prices.
USDJPY slipped ion a bit of risk aversion selling after the Paris terrorist attack but remains well above this week’s 108.17 low.
USDCAD Technical outlook:
The intraday USDCAD technicals are bullish while prices are above 1.3370 and looking for a break of resistance in the 1.3490-95 area to extend gains to 1.3550 and then 1.3600. A move below 1.3460 would extend losses to 1.3420 and then 1.3370. If 1.3360 breaks it would suggest that a short-term top is in place at 1.3495 and lead to 1.3260-1.3490 consolidation
Today’s Range 1.3460-1.3530
Chart: USDCAD 2 hour