The Canadian dollar was losing ground on Friday and the USDCAD pair was trading somewhat higher during the London session, hovering around 1.2670 and testing the 100 day moving average.
Investors are waiting for today’s Canadian inflation data, with the CPI inflation expected to slow to 0.4% month-on-month, from 0.6% scored previously. In addition, retail sales are also forecast to weaken from 0.9% to 0.4%. Both numbers are therefore expected on the weaker side and if confirmed, the Loonie could weaken further.
The WTI oil continues to march higher and was trading at 69 USD on Thursday, which is the highest level in 4 years. Advancing oil could be supportive for the Canadian dollar.
The price is now stuck between the 100 day moving average at 1.2680 and the 200 day moving average at 1.2620. Therefore, the short-term outlook is neutral. If the pair jumps above the 100 day moving average, bulls could push the USDCAD pair to 1.2750 in the initial reaction.
On the other hand, should the support at the 200dMA fall, the next target for bears could be near 1.2570 and afterward at the current cycle lows around 1.2540. In all cases we strongly recommend to have rigorous money and risk management.
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