Both the US and Canada have inflation updates coming this week, so I look forward to that continued trend in USD/CAD.
Could we see a quick move in the opposite direction before the big reports are printed?
The pair is currently moving lower within a descending channel on its hourly time frame and seems to be reconsidering the ground.
USD/CAD forex for one hour Planned by TV
Now the bottom of the channel lines up with S1 (1.3120), so buyers might be keen to defend the support, which is near last week’s lows as well.
Stochastic indicates oversold conditions or exhaustion among sellers, and a rally could indicate that the dollar bulls are back in the game.
In this case, another bounce from support could send USD/CAD back to the mid-channel area of importance at 1.3150 or the top near today’s pivot point (1.3200) and a key psychological marker.
Expectations of weaker inflation numbers out of Canada may be enough to dissuade the Canadian dollar bulls from charging ahead of the actual release. After all, much less May CPI Readings It might be enough to convince BOC to stop hiking again.
As for the US dollar, there is not much in the way of high-level issuance today, so market sentiment may remain in the driver’s seat. So far, the US dollar is starting the week in full swing while the riskier holdings are in the green.
Do you think risk-off flows are about to return soon and spur another bounce in USD/CAD?
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