USD/CAD awaits US CPI, bulls ready to charge
|- USD/CAD bulls are looking for an upside breakout.
- Bulls seeking for the 21-day EMA to give way post US CPI.
USD/CAD is trading at 1.2112 and flat on the day so far after moving in a tight range ahead of key foreign events between 1.2104 and 1.2113.
In what has been the worst volatility in the forex space since 2019, the currencies are treading water ahead of key events that are due in the forthcoming days.
Firstly, although without much of a reaction, the Bank of Canada stayed on course to reduce stimulus further over the coming months and as upcoming US inflation data drew attention.
There was no surprise here as the BoC, after all, has been the first major central bank to cut back on money-printing stimulus programs since the start of the covid pandemic.
Its key interest rate was left at a record low 0.25% as was the pace of quantitative easing.
The BoC said that the economy would "rebound strongly" as vaccinations against COVID-19 picked up.
Meanwhile, WTI was on the backfoot later in the day after it fell from multi-week highs following US inventory data that showed a surge in gasoline inventories.
In other news, the nation has been cautiously optimistic enough to ease some COVID-19 border restrictions, saying it was prepared to relax quarantine protocols for fully vaccinated citizens returning home starting in early July.
All eyes on US CPI
US Consumer Prices will be in focus on Thursday after the upside surprise in April sparked market turbulence.
The markets are looking for 0.5% MoM and 4.7% YoY overall, 0.5% MoM, 3.5% YoYex-food & energy.
USD/CAD technical analysis
As per the following prior analysis, the bulls are looking for an upside extension on the daily charts:
''The price has moved higher to test the 21-day EMA. A break there opens risk of a bullish extension out of the accumulation zone.
Post BoC live market
A break of the 21-day EMA will be significant.
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