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Canadian CPI preview: What to expect of USD/CAD

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 18, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Córdoba) - Canadian consumer price index for November is the highlight of the American session to be released at 13:30 GMT. Headline inflation is expected to grow 0.1% MoM and 1.5% YoY, while core inflation, which excludes volatile items food and energy, is expected to stay flat MoM but to rise 2.3% YoY.

    With the Fed liftoff behind and markets entering holiday mode, data is not expected to trigger much volatility. However, with USD/CAD trading at 11-year highs and technicals showing overbought readings in almost every time frame, higher-than-expected inflation numbers could led to a significant correction. For the same reason, in case of disappointing CPI data, USD/CAD could attempt to push higher, but the upside potential seems limited at the moment.

    USD/CAD levels to watch

    In terms of technical levels, on the downside short-term supports are seen at 1.3777 (Dec 17 low), 1.3716 (10-day SMA) and 1.3672 (Dec 15 low). On the upside, next resistances could be faced at 1.3985 (11-year high, Dec 17), 1.4003 (May 18 2004 high), 1.4086 (Aug 28 2003 high) and then 1.4100 (psychological level).
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