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USD/CAD: Canadian Dollar Jumps On Strong CPI

By Kenny FisherForexAug 17, 2018 10:56
USD/CAD: Canadian Dollar Jumps On Strong CPI
By Kenny Fisher   |  Aug 17, 2018 10:56
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The Canadian dollar has improved in the Friday session. Currently, USD/CAD is trading at 1.3082, down 0.56% on the day. On the release front, Canada’s monthly CPI was unexpectedly strong, climbing 0.5%. This easily beat the estimate of 0.1%. Other inflation indicators looked strong, with readings around 2.0%. There was more good news as Foreign Securities Purchases jumped to C$11.55 billion, crushing the estimate of C$4.91 billion. In the U.S., Preliminary UoM Consumer Sentiment disappointed, dropping from 97.1 to 95.3 points. This missed the forecast of 98.1 points.

A booming U.S. economy and investor jitters over global trade tensions have dampened risk appetite and weighed on the Canadian dollar, as nervous investors have snapped up the U.S. currency. On Wednesday, USD/CAD touched a high of 1.3175, its highest level since July 16. Strong U.S. data continues to boost the greenback, and this was the case on Wednesday, as retail sales were unexpectedly strong. Core retail sales posted a gain of 0.5% for a second straight month, easily beating the forecast of 0.1%. If consumer confidence follows suit with a strong reading on Friday, it could be a sign of another strong quarter of economic growth.

Canada has not been immune to U.S. tariffs on steel and aluminum, and another headache for Canadian policy-makers has been the renegotiation of the NAFTA accord, which have progressed slowly. Still, officials in Canada and Mexico are hopeful that the flexibility that the U.S. has shown towards the European Union will extend to NAFTA as well. Canadian and Mexican officials are hoping to reach an agreement, despite U.S. President Donald Trump’s stated preference for bilateral agreements. NAFTA is a key component of the Canadian economy and with 80% of the country’s exports headed the U.S., the lingering delays in reaching a new NAFTA accord have weighed on the Canadian dollar. If the parties are able to reach a new agreement, traders can expect the Canadian dollar to move higher.

USD/CAD for Friday, August 17, 2018

USD/CAD for Aug. 16-17, 2018.
USD/CAD for Aug. 16-17, 2018.

USD/CAD, August 17 at 10:00 DST

Open: 1.3156 High: 1.3170 Low: 1.3066 Close: 1.3082

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2831 12970 1.3067 1.3160 1.3292 1.3436

USD/CAD was flat in the Asian and European sessions. The pair has posted considerable losses in North American trade

  • 1.3067 was tested earlier in support. It is a weak line and could see further action in the North American session
  • 1.3160 is the next resistance line
  • Current range: 1.3067 to 1.3160

Further levels in both directions:

  • Below: 1.3067, 1.2970, 1.2831 and 1.2733
  • Above: 1.3160, 1.3292 and 1.3436

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

USD/CAD: Canadian Dollar Jumps On Strong CPI

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USD/CAD: Canadian Dollar Jumps On Strong CPI

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