USDCAD – Can US Dollar Break 1.3700 Ahead of Canada’s CPI?19 May, 2017 by Aayush Jindal in Market Analysis, Technical Analysis, USDCAD
- The US Dollar after failing to break 1.3800 against the Canadian Dollar moved down.
- The USDCAD pair broke two bullish trend lines at 1.3765 and 1.3680 on the 4-hours chart during the downside.
- Today in Canada, the Consumer Price Index (CPI) for April 2017 will be released by the Statistics Canada, which is forecasted to increase by 0.5% (MoM).
- In the US, the Philadelphia Fed Manufacturing Index for May 2017 published the Federal Reserve Bank of Philadelphia posted an increase from 22 to 38.
USDCAD Technical Analysis
The US Dollar traded towards 1.3800 against the Canadian Dollar during the start of May 2017. The USDCAD pair failed to break 1.3800 and started a downside move.
During the decline, the pair broke the 1.3760 support and the 23.6% Fib retracement level of the last wave from the 1.3410 low to 1.3790 high. Moreover, there was a break below two bullish trend lines at 1.3765 and 1.3680 on the 4-hours chart.
The downside move was such that the pair tested the 1.3600 support. Later, the 50% Fib retracement level of the last wave from the 1.3410 low to 1.3790 high prevented declines.
The pair is currently correcting, but likely to face sellers near 1.3640 and a bearish trend line at 1.3700. It won’t be easy for USDCAD to break 1.3700 once again in the near term.
Philadelphia Fed Manufacturing Index
Recently in the US, the Philadelphia Fed Manufacturing Index for May 2017 was published the Federal Reserve Bank of Philadelphia. The forecast was lined up for a decline in the index from 22 to 19.5 in May 2017.
The result was positive, as there was an increase from 22 to 38. The report mentioned that the “index has been positive for 10 consecutive months. This month, the index recovered some of the declines of the previous two months, but it still remains slightly below its high reading of 43.3 in February“.
The US Dollar was seen recovering after the release, and USDCAD traded near 1.3620.
Economic Releases to Watch Today
- German Producer Price Index for April 2017 (MoM) – Forecast +0.2%, versus 0% previous.
- German Producer Price Index for April 2017 (YoY) – Forecast +3.2%, versus +3.1% previous.
- Euro Zone Current Account for Jan 2017 – Forecast 32.3B versus 37.9B previous.
- Canadian Retail Sales March 2017 (MoM) – Forecast +0.4%, versus -0.6% previous.
- Canadian Retail Sales ex Autos March 2017 (MoM) – Forecast +0.2%, versus -0.1% previous.
- Canada’s Consumer Price Index April 2017 (MoM) – Forecast +0.5%, versus +0.2% previous.
- Canada’s Consumer Price Index April 2017 (YoY) – Forecast +1.7%, versus +1.6% previous.