Canadian inflation: Trigger for a bullish break out in USDCAD?
After the Bank of Canada’s last rate decision, where Stephen Poloz, one of the few central bankers around the globe resisting the push towards an easier monetary policy, told markets that he had begun to consider an insurance rate cut. Because of this, today’s Canadian inflation data becomes of higher interest.
With this dovish outlook, and USD/CAD once again gaining against the 1.3000 level the currency pair stays range-bound between 1.3000 and 1.3350/3400.
But if Canadian inflation comes in below expectations (It’s currently at 1.9%), which would come as a surprise given the recent push higher in oil prices, the subdued inflation outlook would bring 1.3350/3400 to the attention of USD/CAD traders and with rising BoC rate cut speculations, a break higher becomes a serious option.
Such a break technically activates the region around 1.3550 as a first target, and above the region around the current yearly highs around 1.360/3700.
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Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
With this dovish outlook, and USD/CAD once again gaining against the 1.3000 level the currency pair stays range-bound between 1.3000 and 1.3350/3400.
But if Canadian inflation comes in below expectations (It’s currently at 1.9%), which would come as a surprise given the recent push higher in oil prices, the subdued inflation outlook would bring 1.3350/3400 to the attention of USD/CAD traders and with rising BoC rate cut speculations, a break higher becomes a serious option.
Such a break technically activates the region around 1.3550 as a first target, and above the region around the current yearly highs around 1.360/3700.
Ready to start trading the live markets? Then open a free account with Admiral Markets - 8,000+ instruments to choose from, some of the market's tightest typical spreads, and the world's #1 multi-asset trading platform. admiralmarkets.com/start-trading/
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
