USD/CAD looks to close below 1.33 after Canadian CPI data, FOMC minutes

  • Annual CPI in Canada stays unchanged at 2% in July vs 1.7% expected.
  • FOMC minutes show couple of policymakers favoured a 50 bp cut.
  • WTI settles at $55.68, erases 0.8% on Wednesday.

The USD/CAD pair dropped to a daily low of 1.3253 in the early trading hours of the American session after Statistics Canada released its inflation report. Although the pair lost its bearish momentum in the remainder of the session, it remains on track to close the day in the negative territory. As of writing, the pair was down 0.22% on the day at 1.3285.

CPI data lifts CAD on Wednesday

The Consumer Price Index (CPI) in July remained unchanged at 2% on a yearly basis in July and came in higher than the market expectation of 1.7%. More importantly, this data suggested that the Bank of Canada could refrain from cutting its policy rate and provided a boost to the Loonie.

Commenting on the data, however, TD Securities analysts argued that the Bank of Canada (BoC) could look through the upside surprise partly due to the fact that the challenges confronting the Canadian economy are external in nature. 

"If the global economy slows markedly, the Bank of Canada will be forced to provide stimulus even with buoyant mid-year price pressures," analysts said.

Meanwhile, after rising to a weekly high of $57.43 earlier in the day, the barrel of West Texas Intermediate reversed its direction and settled 0.8% lower to make it difficult for the commodity-related CAD to continue to gather strength against its American counterpart.

On the other hand, the minutes of the FOMC's July 30-31 meeting today revealed that a couple of policymakers favoured a 50 basis point rate cut but also said that most policymakers viewed the decision to cut the policy rate by 25 basis point as a 'recalibration' of the policy stance. The US Dollar Index is now looking to close the day in the positive territory.

Technical levels to watch for


Today last price 1.3289
Today Daily Change -0.0029
Today Daily Change % -0.22
Today daily open 1.3318
Daily SMA20 1.3232
Daily SMA50 1.3185
Daily SMA100 1.3299
Daily SMA200 1.3314
Previous Daily High 1.3346
Previous Daily Low 1.3308
Previous Weekly High 1.334
Previous Weekly Low 1.3184
Previous Monthly High 1.3215
Previous Monthly Low 1.3016
Daily Fibonacci 38.2% 1.3323
Daily Fibonacci 61.8% 1.3332
Daily Pivot Point S1 1.3302
Daily Pivot Point S2 1.3287
Daily Pivot Point S3 1.3265
Daily Pivot Point R1 1.334
Daily Pivot Point R2 1.3362
Daily Pivot Point R3 1.3378



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