USD/CAD: a slowing uptrend
By Mark Jensen
USD/CAD is trading within an uptrend on the daily chart.
Last week the pair declined (CAD strengthened) on higher than expected inflation data from Canada. Some players thought that Bank of Canada could start upgrading its CPI forecasts and eventually consider tightening monetary policy. However, Bank of Canada’s Stephen Poloz said at the weekend that the recent consumer price jump was only temporary, and USD/CAD rose on Monday. Bank of Canada’s Senior Deputy Governor Carolyn Wilkins also gave dovish comments yesterday.
Canada will release retail sales data at 12:30 GMT. Forecasts are negative. This may help USD/CAD bulls to gather strength. Morgan Stanley and Goldman Sachs are bullish on the pair targeting 1.13 and 1.14 respectively. Credit Suisse has a buy limit at 1.0885. Danske has a buy limit at 1.0970.
Judging by ADX, this trend isn’t very strong. The pair may do move consolidation before rising above 1.1100. USD/CAD is supported by the 200-day MA at 1.0915 and the bullish Ichimoku Cloud at 1.0885.
Chart. Daily USD/CAD