We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Mixed
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Real Time News
  • Norway's oil industry raises 2019-2020 investment forecasts - 2019 at NOK 182.9bln (NOK 181.7bln forecast in August) - 2020 at NOK 182.6bln (NOK 174bln forecast in August
  • Here are yesterday's poll results for Johnson vs Corbyn TV debate, who was more convincing ? https://t.co/Pc1PiCrQXC
  • Indices Update: As of 08:00, these are your best and worst performers based on the London trading schedule: Wall Street: -0.18% US 500: -0.19% Germany 30: -0.57% France 40: -0.59% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/DxAqWvv4TC
  • 🇨🇭 CHF Industrial Output w.d.a. (YoY) (3Q), Actual: 8.0% Expected: 4.0% Previous: 4.0% https://www.dailyfx.com/economic-calendar#2019-11-21
  • How can you use PPI in #forex trading? Find out: https://t.co/TZEdU2SdaS #tradingstyle https://t.co/xPLzeM0Hr0
  • Heads Up:🇨🇭 CHF Industrial Output w.d.a. (YoY) (3Q) due at 07:30 GMT (15min), Actual: N/A Expected: 4.0% Previous: 4.8% https://www.dailyfx.com/economic-calendar#2019-11-21
  • European Opening Calls From IG #FTSE 7234 -0.39% #DAX 13096 -0.47% #CAC 5868 -0.45% #MIB 23214 -0.59% #IBEX 9183 -0.46% #STOXX 3667 -0.45%
  • The $CAD may fall if local CPI and retail sales data adds fuel Bank of Canada easing bets. Where do AUD/CAD, NZD/CAD and GBP/CAD stand ahead of the Canadian data? Get your market update from @ddubrovskyFX here:https://t.co/oIDWTbIFu9 https://t.co/o1uZsKpHRs
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.89%, while traders in US 500 are at opposite extremes with 80.64%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/HehGdVZjiP
  • Forex Update: As of 05:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.06% 🇬🇧GBP: 0.04% 🇪🇺EUR: 0.03% 🇨🇦CAD: -0.02% 🇳🇿NZD: -0.06% 🇦🇺AUD: -0.10% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/0SmnI3T0hU
USD/CAD Rate Forecast: Post-FOMC Advance at Risk on Sticky Canada CPI

USD/CAD Rate Forecast: Post-FOMC Advance at Risk on Sticky Canada CPI

2019-03-22 11:00:00
David Song, Currency Strategist
Share:

Trading the News: Canada Consumer Price Index (CPI)

Updates to Canada’s Consumer Price Index (CPI) may curb the USD/CAD advance following the Federal Reserve interest rate decision as the headline reading for inflation is expected to hold steady at 1.4% per annum in February.

Image of DailyFX economic calendar

Signs of sticky price growth may boost the appeal of the Canadian dollar as it puts pressure on the Bank of Canada (BoC) to further embark on its hiking-cycle, and another 1.4% print may push Governor Stephen Poloz and Co. to endorse a hawkish forward-guidance at the next meeting on April 24 as the central bank ‘expects CPI inflation to be slightly below the 2 per cent target through most of 2019, reflecting the impact of temporary factors.’

However, an unexpected slowdown in Canada’s CPI may fuel the recent advance in USD/CAD as it dampens bets for a BoC rate-hike, and a below-forecast print may encourage Governor Poloz and Co. to alter the outlook for monetary policy as officials warn ‘it will take time to gauge the persistence of below-potential growth and the implications for the inflation outlook.’

Impact that Canada’s CPI had on USD/CAD during the previous release

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

JAN

2019

02/27/2019 13:30:00 GMT

1.4%

1.4%

-10

+10

January 2019 Canada Consumer Price Index (CPI)

USD/CAD5-Minute Chart

Image of usdcad 5-minute chart

Canada’s Consumer Price Index (CPI) narrowed to 1.4% from 2.0% per annum in December, while the trimmed core reading for inflation held steady at 1.9% for the third consecutive month. A deeper look at the report showed the weakness was largely driven by a 3.1% decline in energy prices, with the cost for Transportation also slipping 1.0% in January, while food prices increased another 0.8% after rising 1.0% the month prior.

The Canadian dollar gained ground following the stickiness in the core CPI, but the reaction was short-lived, with USD/CAD bouncing back from a low of 1.3118 to close at 1.3156. Review the DailyFX Advanced Guide for Trading the News to learn our 8 step strategy.

USD/CAD Rate Daily Chart

Image of usdcad daily chart
  • USD/CAD appears to be making a run at the monthly-high (1.3467) following the string of failed attempts to close below the Fibonacci overlap around 1.3290 (61.8% expansion) to 1.3310 (50% retracement), with the Relative Strength Index (RSI) highlighting a similar dynamic as the oscillator comes off of trendline support and looks to extend the bullish formation from earlier this year.
  • With that said, the 1.3420 (78.6% retracement) to 1.3460 (61.8% retracement) region is back on the radar, but need a break/close above the overlap to open up the next topside area of interest around 1.3540 (23.6% retracement).

Sign up and join DailyFX Currency Analyst David Song LIVE for an opportunity to discuss potential trade setups.

Additional Trading Resources

New to the currency market? Want a better understanding of the different approaches for trading? Start by downloading and reviewing the DailyFX Beginners Guide.

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader series on how to effectively use leverage along with other best practices that any trader can follow.

--- Written by David Song, Currency Analyst

Follow me on Twitter at @DavidJSong.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.