The USD/CAD pair was traded at 1.2957 at the time of writing. In the short term, it seems undecided as the Dollar Index moves somehow sideways as well. Fundamentally, Canada reported higher inflation in May. The CPI rose by 1.4% versus 1.0% expected and versus 0.6% growth in the previous reporting period, while the Core CPI surged by 0.8% compared to 0.7% growth in April. Later, the Flash Services PMI is expected at 53.9 points, the Flash Manufacturing PMI could drop from 57.0 to 56.0 points. Unfortunately for the USD, the Unemployment Claims came in at 229K in the last week above 227K expected.
From the technical point of view, the USD/CAD pair is trapped between 1.2996 and 1.2905 levels. Escaping from this range could bring new trading opportunities. In the short term, the price was in a corrective phase after its swing higher. As you can see on the H1 chart, the rate failed to stay below the 23.6% (1.2945) signaling that the retreat ended. Still, only a valid breakout above the pitchfork’s upper median line and above 1.2996, a new higher high activates an upside continuation. A new lower low may signal a larger correction.
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