USDCAD Loonie is in consolidation process.

Canada CPI unexpectedly rebounded to 2.0% in December despite a notable drag from energy prices Expectations were for the headline rate to hold steady at 1.7%, but a significant jump in airfares (methodology changes have made this component extremely volatile over the last six months) added a surprising 0.3 percentage points. By contrast, the BoC’s core inflation measures were marginally softer on balance (averaging 1.87% y/y) following revisions to the November figures. The BoC sees that as evidence the economy has been operating close to full capacity for more than a year now.

BoC is likely to be patient in raising interest rates. Markets think that The BoC will want to see how the economy is progressing through this latest oil price decline, and expect the current pause in their tightening cycle will extend through their next meeting in March

The U.S. dollar traded higher against all of the major currencies Friday with the exception of the Canadian dollar because as it turns out, the U.S. government shutdown has been good for the dollar and stocks.

Last week we saw the pair in a consolidation process. The downside is limited by 1.31800 and the upside capped by 1.33000.

Loonie is trading below all main EMAs on the H4 chart still in the bearish territory of smaller chart timeframes. A clear break above 1.33000 may carry the price towards 1.33600 which is blocked by the EMA100 and EMA200.

A clear break below 1.32400 may push the price towards 1.31800 – SMA 100 Support-

We need to see a firm closing below 1.31800 for the bearish continuation. 1.30000 will be the targets of the Bears after a potential breakout of 1.31800.

Harmonic Overview:


A potential Bullish Cypher Pattern would be completed at 1.32000. This level can be used as a buying opportunity. Details will be published for the members.

Have a nice weekend.