Technical Bias: Bullish
- US Dollar traded higher against the Canadian Dollar after finding bids around 1.3000-20.
- US Consumer Price Index released by the US Bureau of Labor Statistics registered a rise of 0.1% in July 2015, whereas the market was expecting it to be around 0.2%.
- In terms of the yearly change, the US CPI increased by 0.2%, just as the market expected.
- USDCAD is trading near a major bearish trend line as investors await for a break.
The US Dollar enjoyed a decent run towards the upside against the Canadian Dollar. However, the USDCAD pair is facing a monster resistance in the form of a bearish trend line on the hourly chart. The pair has to clear the trend line if it has to trade higher moving ahead.
The most important point is the fact that the 100 and 200 hourly simple moving averages are also around the same trend line to act as a barrier for buyers.
On the downside, the 1.3060 level might serve as a support.
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 a rise of 0.2% in July 2015, compared to the preceding month. However, the outcome was on the lower side, as the US Consumer Price Index rose 0.1%.
In terms of the yearly change, the US CPI increased by 0.2% in July 2015, compared to the same month a year ago just as the market expected,
The US core CPI i.e. the index for all items less food and energy also increased 0.1% in July, compared to the preceding month.
Overall, the outcome was a bit disappointing, but might not hurt the US dollar to a great extent in the short term.
We can attempt a buy trade if the USDCAD breaks the highlighted resistance area and settles above it.