CAD CPI: What to Expect of USD/CAD
Canadian inflation figures for the month of April are due later in the
NA session, with market consensus expecting headline consumer prices to
have gained 0.3% on a monthly basis, mainly backed by increasing
gasoline prices. Core prices are seen rising 0.1% inter-month and 2.0%
over the last twelve months.
All in all, and as strategists at TD Securities put it “this data print
will do little to challenge the prevailing macro narrative and outlook
for the overnight rate”.
Regarding CAD, crude oil dynamics remain the exclusive driver, while a repricing of the Fed’s expectations of a rate hike next month – backed by data and hawkish comments by FOMC members/minutes – keeps fuelling the rally in the US dollar and lifting USD/CAD to fresh 6-week tops above the 1.3100 handle.
The next up barrier is located at yesterday’s high at 1.3155, followed by April’s top at 1.3219 and then 1.3312, the 38.2% Fibo retracement of the January-May decline. On the downside, there seems to be decent support around the area of 1.2986/60, where sits he 23.6% Fibo retracement of the January-May down move and the 55-day sma.
