USD/CAD Approaches Critical Juncture Ahead of Canadian CPI Data

Some time ago, I discussed the American dollar to Canadian dollar (USD/CAD) pair, and today, we revisit this instrument as it approaches a critical juncture. Currently, USD/CAD is trading above three key supports: a blue uptrend line, a green horizontal support, and the 38.2 Fibonacci retracement level. While the price is holding above these supports, there’s a noticeable lack of buying pressure, suggesting a pause in bullish momentum.

The upcoming Canadian CPI data, set to be released before the start of the American session, could be the catalyst needed to inject volatility into this pair and determine its direction. A break below these supports would signal a strong sell, while a push higher following the data would confirm a buy signal.

Traders should closely monitor the market’s reaction to the CPI release. If the price breaks through these supports, it would indicate a shift in sentiment towards selling. Conversely, a rebound and upward movement would affirm bullish momentum, providing a clear buy signal for the USD/CAD pair. The outcome of today’s data will be pivotal in shaping the near-term trend for this currency pair.

Source: https://www.axiory.com/analytics/technical-analysis/usd-cad-approaches-critical-juncture-ahead-of-cana