USD/CAD Analysis: The Loonie Strengthens amid Rising Inflation

FXOpen

Yesterday, data from Statistics Canada was published, which testified to the stability of inflation in the country: the rise in prices for the month amounted to +0.6% (+0.3% was expected).

This increased the likelihood that the Bank of Canada will raise the rate yet again. Now it is at a maximum for 22 years and is 5.0%.

As a result, USD/CAD is declining today after a volatile Tuesday.

Bullish arguments:
→ the price may be supported by the median line and the lower limit of the current ascending channel;
→ the price may be supported by the level of 1.34, which previously served as resistance;
→ support may continue to be provided by the level of 1.344.

Bearish arguments:
→ the price made a false breakout of the top on August 8;
→ resistance is provided by the psychological level at 1.35;
→ divergence on the RSI indicator;
→ the price is in the zone of a sharp fall in the rate recorded on June 1 — sellers can maintain control.

Since August 1, the USD/CAD rate has risen by more than 2.3%. In such conditions, a correction may be a fairly natural scenario.

Trade global forex with the Innovative Broker of 2022*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about trading forex with FXOpen.

* FXOpen International, Innovative Broker of 2022, according to the IAFT

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Forex Analysis

Market Analysis: American Currency Rises Sharply after Fed Meeting Will Stagflation Persist in the UK? EUR/GBP Volatility May Be an Indicator Market Analysis: Commodity Currencies Find Short-term Bottom USD/CAD Analysis: How the Bank of Canada Decision Affected the National Currency Commodity Currencies, Pound and Euro in Search of Medium-term Bottom

Latest articles

Forex Analysis

Market Analysis: American Currency Rises Sharply after Fed Meeting

As expected, the decision on the interest rate had a powerful impact on the markets. Thus, the euro/US dollar pair lost more than 100 pp in just a couple of hours and updated its recent low at 1.0630,

Commodities

Oil Analysis: Finally, A Bearish Reversal?

The policy of OPEC+ countries to voluntarily reduce oil production was one of the drivers thanks to which the price of WTI oil increased by approximately 40% from its low in June. In such cases, it is appropriate to use

Commodities

Central Bank Week Shakes Up Gold Market

Yesterday, the main event of the week took place — the Federal Reserve meeting, which had a noticeable impact on the market of assets denominated in US dollars. But besides the Fed meeting, there are a number of other events this

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.