USD/CAD flirting with lows near 1.2700, US CPI eyed

Pablo Piovano FXStreet

The Canadian Dollar is trading on a firm note at the end of the week vs. its American neighbor, now dragging USD/CAD to the area of daily lows near the key support at 1.2700 the figure.

USD/CAD now looks to US CPI

The pair is retreating for the first time after two consecutive advances, although the near term bullish bias seems unchanged amidst two consecutive weeks closing with gains.

CAD has been shedding part of its strong rally since fresh tops vs. the buck in the vicinity of 1.2410 (area last traded in June 2015), always on the back of a moderate bounce in the greenback and some profit taking sentiment, particularly after the Bank of Canada raised its key rate to 0.75% at the July meeting.

Looking ahead, the pair should stay under pressure in light of the release of July’s inflation figures tracked by the CPI, with consensus expecting headline consumer prices to have risen at an annualized 1.8% and core prices at 1.7% YoY.

USD/CAD significant levels

As of writing the pair is losing 0.18% at 1.2720 and a breach of 1.2668 (low Aug.10) would aim for 1.2633 (10-day sma) and then 1.2595 (21-day sma). On the other hand, the next hurdle is located at 1.2753 (23.6% Fibo of the 2017 drop) seconded by 1.2940 (38.2% Fibo of the 2017 drop) and finally 1.2971 (55-day sma).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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