USDCAD Overnight Range 1.2175-1.2290
US dollar losses overnight were vaporized following the release of US CPI. The greenback soared across the board when Core CPI rose 1.8% y/y in April. US dollar bulls believe that the inflation gains effectively reduced another barrier to the Fed raising interest rates.
USDCAD was drifting aimlessly around the 1.2200 level until higher US CPI data put a bid under the US dollar. Since the dollar had been sold against the majors all night, it was time to buy them back. Lost amidst the US inflation report noise was a news that Canada Retail Sales handily beat expectations. In addition, the Canadian CPI data, although slightly worse than forecast is in line with BoC projections. However, that wasn’t enough to overcome renewed US dollar demand and with the decisive break of the downtrend line, the target becomes 1.2350 with 1.2240 reverting to support.
USDCAD technical outlook
The intraday USDCAD technicals are bullish while trading above 1.2190. The decisive break of the USDCAD downtrend from March with the move above the 1.2250-60 area has hung a target on the 1.2350-75 area which represents the 50% Fibonacci retracement level of the March-April move as well has the prior January-March floor. For today, USD support is at 1.2240 and 1.2210. Resistance is at 1.2305 and 1.2340
Today’s Range 1.2240-1.2320