Dollar Rockets Higher Post US CPI

Key Highlights

  • US Dollar gained a lot of bids after a flurry of releases in the US and Canada.
  • Canadian Consumer Price Index (CPI) published by the Statistics Canada posted an increase of 0.2% in June 2015, compared with the forecast of 0.3%.
  • In the US, the Consumer Price Index released by the US Bureau of Labor Statistics registered an increase of 0.1% in June 2015, which was in line with the market forecast.

US Consumer Price index

Earlier during the NY session, the US Consumer Price Index, which is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services was released by the US Bureau of Labor Statistics. The forecast was lined up for an increase of 0.1% in June 2015, compared with the same month a year ago. The outcome was in line with the forecast, which was a positive sign for the USD bulls. In terms of the monthly change, the US CPI gained by 0.3%, which was a bit lower when compared with the last rise of 0.4%.

US CPI

The report mentioned that the “energy index rose for the second straight month as the indexes for gasoline, electricity, and natural gas all increased. The food index posted its largest increase since September 2014, partly due to a sharp increase in the eggs index“.

Moreover, the US core CPI rose 1.8% in June 2015, compared with June 2014 which was also in line with the forecast.

Canadian CPI

There was one more major event as the Canadian Consumer Price Index (CPI) was released by the Statistics Canada. The forecast was slated for an increase by 0.3% in June 2015, compared to the preceding month. However, the outcome missed the mark, as the Canadian Consumer Price Index posted gained only by 0.2%.

The Canadian Dollar was seen gaining bids against the US Dollar after the release.

USDCAD Technical Analysis

The US Dollar rocketed higher against a basket of currencies after the US CPI release, but there was not major upside in USDCAD, as the Canadian CPI release stalled gains.

USDCAD

There is a contracting triangle pattern formed on the hourly chart, which is likely to clear the way for more gains in the near term after a mild correction.



Aayush Jindal

Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over a decade as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency, commodities, Bitcoin and Ethereum markets.

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