The US Dollar (USD) inched lower against the Canadian Dollar (CAD) on Friday, decreasing the price of USDCAD to less than 1.3100 following the Canada’s Consumer Price Index (CPI) news. The technical bias remains bearish because of a lower low in the recent downside move.

Technical Analysis

As of this writing, the pair is being traded near 1.3084. A support may be noted around 1.3028, the confluence of a couple of trendline support zones as demonstrated in the given below daily chart. A break below the 1.3028 support shall incite renewed selling pressure, validating a move towards the 1.2950 support.

On the upside, the pair is likely to face a hurdle around 1.3169, the intraday high of yesterday ahead of 1.3180, the trendline resistance area and then 1.3283, the 50% fib level. The technical bias shall remain bearish as long as the 1.3209 resistance area is intact.

Canada’s CPI Release

Canadian inflation jumped more than expected in January, snapping two consecutive months of declines, according to official data released on Friday. According to the report from Statistics Canada, consumer price index (CPI) for January increased 0.9% from the previous month, compared to forecasts for a 0.3% gain and after a 0.2% decrease in December. Year-on-year, CPI advanced 2.1% last month, compared to expectations for a 1.6% rise and December’s reading of a 1.5% gain. Core inflation, which excludes food and energy, rose by 0.5% in January, compared to expectations for a 0.1% decline and after a prior drop of 0.3%.

Trade Idea

Considering the overall technical and fundamental outlook, selling the pair around current level appears to be a good strategy in short to medium term.