USD/CAD Drops to Retest Weekly Lows After Canadian CPI

The USD/CAD currency pair pulled back on Wednesday to end the days trading session at around 1.3293 after Canada’s CPI beat expectations. The currency pair had plunged to retest the weekly lows before making a slight recovery later in the day.
The USD/CAD currency pair continues to trade in an ascending wedge with a flatter top, which indicates that the pair’s bullish run could be suffering exhaustion, partially fueled by a lack of enough fundamental data to support the run.

USD/CAD Fundamentals Overview

From a fundamental perspective, the USD/CAd currency pair is trading at the back of some key economic data from Canada, which appears to have triggered Wednesday’s pullback.
On Wednesday, the Canadian Consumer Price Index Core for July (MoM) grew by 0.3% better than the predicted growth of about 0.2%. The (YoY) growth missed expectations of 2.3% with 2.0%. However, the BoC’s non-core CPI beat on both measures with 0.5% (MoM) and 2.0% (YoY) versus the expectations of 0.2% and 1.7% respectively.
On Tuesday, the Loonie had also received a boost after the Manufacturing Shipments posted a lower decline of 1.2% (MoM) for June, compared to an expected decline of 1.7%.
On the other hand, the greenback continues to trade under increased pressure due to the ongoing trade wars with China and the recent interest rate cut. President Trump is also pressing the Federal Reserve to cut rates further, which could add more pressure to the USD.

USD/CAD Technical Analysis (the 60-min Chart)

Free $100 Forex No-Deposit Bonus

USD/CAD Drops to Retest Weekly Lows After Canadian CPI

From a technical viewpoint, the USD/CAD currency pair appears to be suffering momentum exhaustion in a bullish wedge, which is becoming flat at the top. This could result in a bearish breakout in the pair which could create interesting opportunities down below for the bears.
Therefore, going into the final two days of the week, the bears will target profits at around 1.3251 and lower at 1.3211. On the other hand, the bulls will be looking to target short-term profits and any rebound at around 1.3296 and 1.3337.

USD/CAD Technical Analysis (the Daily Chart)

USD/CAD Drops to Retest Weekly Lows After Canadian CPI

In the daily chart, the USD/CAD currency pair appears to be still on course to complete the fourth impulse in Elliot’s 1,2,3,4,5 Impulse Wave analysis pattern. This gives the bulls optimism in the intermediate time frame but looking at the bigger picture, the pair continues to trade within a slightly bearish trending channel, which gives the bears control in the long-term.
Therefore, the bulls will target intermediate profits at around 1.3427 while the bears will look at 1.3200. Long-term opportunities exist at 1.3519 for the bulls while the bears will be aiming at the 1.3115 level.
In summary, the USD/CAD currency pair continues to experience strong bearish pressure in the long-term while the bulls’ short-term control appears to be running out of momentum.
Copyright © 2019. All Rights Reserved. FXDailyReport.Com
Risk Warning: Trading CFDs is a high risk activity and you may lose more than your initial deposit. You should never invest money that you cannot afford to lose. FXDailyReport.com will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets.