USDCAD Canadian inflation hits 1991 levels – 18 February 2022

USDCAD Canadian inflation hits 1991 levels

USDCAD Canadian inflation hits 1991 levels. Against the backdrop of Canadian macroeconomic statistics, the USD/CAD pair shows local sideways dynamics, trading at 1.2691.

According to the January report, Canada’s consumer price index rose by 0.9% MoM instead of 0.6% expected, which contributed to the growth of the annual rate to 5.1%, which is higher than 4.8% in December. The same index, excluding prices for raw materials and food products, was 4.3%, rising from 4.0% a month earlier. According to a report released Wednesday by the National Bureau of Statistics, Canada’s inflation rate rose to 5.1% last year, the highest since September 1991. With labor market indicators, this growth is not as critical as in the US, and the Bank of Canada has the time and opportunity to control the situation.

The American currency continues to trade without pronounced dynamics, as declines due to ambiguous macroeconomic statistics replace the rises almost the next day. The current local weakening is associated with another increase in the number of people receiving unemployment benefits, which this week amounted to 248K against 225K a week earlier. Analysts had expected a decline to 219K, and the final result disappointed the market. We should also note a significant reduction in the index of manufacturing activity from the Philadelphia Fed, which fell to 16.0 points in February from 23.2 points a month earlier.

Support and resistance

On the global chart, the price moves within the local triangle pattern. Technical indicators are in the state of a local buy signal: the range of EMA fluctuations on the Alligator indicator is directed upwards, and the AO oscillator histogram forms ascending bars in the buying zone.

Support levels: 1.2656, 1.2520.

Resistance levels: 1.2747, 1.2880.

USDCAD Canadian inflation hits 1991 levels

USDCAD potential for further growth remains – 10 December 2021

USDCAD potential for further growth remains

USDCAD potential for further growth remains. The decline of USD/CAD from 1.2827 stopped at 1.2631 after the decision of the Bank of Canada to leave the interest rate unchanged at 0.25%.

The maintenance of the current course of monetary policy by the financial regulator is associated with the revision of inflation targets. Deputy Governor of the Bank of Canada Toni Gravelle said the day before that fears about the risks of a jump in consumer prices are only growing at the moment.

In turn, the decrease in the number of initial jobless claims in the United States to 184K strengthens the US dollar (analysts predicted the figure at 215K). Today the markets will be influenced by US inflation data, which will be published at 15:30 (GMT+2). Core inflation is expected to be 4.9% on an annualized basis and 0.5% on a monthly basis. Further growth in consumer prices prompts the US Fed to tighten monetary policy. The first step aimed at changing the current situation in the national economy will be the curtailment of the bond repurchase program, which is planned to be phased out by mid-2022.

Support and resistance

The long-term trend in USD/CAD is upward. This week the support level of 1.2631 was tested, which was held by the traders. Then USD/CAD quotes reached 1.2700 and now the main target of growth is at 1.2827, the breakout of which will allow the “bulls” to consolidate in the area of 1.2910.

The medium-term trend is upward. Target zone 2 (1.2775–1.2752) was broken out last week. The next upside target is target zone 3 (1.3021–1.2997). This week the price has corrected to the key trend support area at 1.2614–1.2592, which was held, and as a result, the price continued to rise.

Resistance levels: 1.2827, 1.2910, 1.3138.

Support levels: 1.2631, 1.2434, 1.2295.

USDCAD potential for further growth remains