The US Dollar (USD) extended downside movement against the Canadian Dollar (CAD) on Wednesday, dragging the price of USDCAD to less than 1.3100 following the release of some important economic news. The technical bias remains bullish because of a higher high in the recent upside rally.
Technical Analysis
As of this writing, the pair is being traded near 1.3087. A support may be noted around 1.3054, the intraday low of yesterday ahead of 1.3000, the confluence of psychological number as well as horizontal support area and then 1.2823 which is another major horizontal support level.
On the upside, the pair is expected to face a hurdle near 1.3139, the intraday high of yesterday ahead of 1.3252, the horizontal resistance area and then 1.3313, the swing high of the last major upside rally. The technical bias will remain bullish as long as the 1.3000 support area is intact.
US Inflation
The U.S. Commerce Department said the consumer price index rose 0.3% in September, in line with expectations and after a 0.2% increase the previous month. Year-on-year, consumer prices increased 1.5% last month, also in line with forecasts and after having risen 1.1% in August. That was its highest reading since October 2014. Core CPI, which excludes food and energy costs, increased by 0.1% last month, below forecasts for a 0.2% rise. The weak report further dampened optimism over the strength of the U.S. economy, after U.S. industrial production data missed expectations on Monday.
Trade Idea
Considering the overall technical and fundamental outlook, selling the pair on short term rallies still appears to be a good strategy in short to medium term.
Trade global forex with the best ECN broker of 2021*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about making your money go further with FXOpen.
* FXOpen International, best ECN broker of 2021, according to the IAFT
