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- USD/CAD formed a bullish candle after Canada’s manufacturing sales edged down 0.2% in September
- 1 US dollar bought 1.3287 Canadian dollars, as of 2:20 PM London time
- Consumer Price Index – 0.3% in October, according to forecasts
The US dollar continued to perform strongly against the Canadian dollar in today’s trade. But lost some ground with the opening of the North American session and the release of Canadian CPI data.
The pair reached an intraday high of 1.3315 in the early morning but gave back most of the gains at the time of writing. As of 2:20 p.m. London time, one US dollar bought 1.3287 Canadian dollars.
Yesterday, the pair formed a strong bullish candle after Canada’s manufacturing sales edged down 0.2% in September. It beat market forecasts of a 0.5% fall. Nevertheless, the latest number is still well below the August reading, when manufacturing sales rose 0.8% month-on-month.
The change in the sales value made by manufacturers is a leading indicator of economic health as it provides valuable insight into future spending, investment, and hiring activities.
Another important market indicator, the Consumer Price Index (CPI) showed that inflationary pressures in Canada are building up again. The CPI came in at 0.3% in October, matching forecasts and rising strongly from the previous month’s 0.4% fall. On a year-over-year basis, the CPI rose 1.9% in October.
Technicals show a vanishing bullish momentum after a powerful break above the November 14 high of 1.3270 this morning. The daily candle is forming a pinbar pattern, signaling a possible rejection of higher prices in the coming period.
The USD/CAD pair looks well supported in the lower 1.32s and higher oil prices could trigger a retest of those levels before we see further buying momentum. The trend in the short-term remains bullish, with the October 10 high of 1.3345 acting as an intermediary target to the upside.
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