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USDCAD trims gains, trades flat after CPI-driven selloff
After sliding to 1.4040 following weaker US CPI, the pair rebounded modestly but remains near key moving averages, with sellers watching 1.4020.
USDCAD eased to little changed after a sharp selloff earlier in the session, following US CPI that came in much weaker than expected and triggered a technical breakdown, Forexlive said.
The pair fell below a support zone between 1.4125 and 1.4143, dropped beneath the 100-hour moving average, and broke an upward-sloping trendline dating back to May 1. After a corrective bounce, price stalled under the broken trendline as fresh selling resumed, and USDCAD extended the decline into the Asian session, reaching a low of 1.4040.
The move then paused just above the next downside target near the mid-June highs around 1.4020, prompting a modest rebound. Forexlive said the rebound retraced to roughly the 50% midpoint of the decline near 1.40768, where sellers regained control and helped drag the pair lower again, with softer-than-expected US PPI adding to the bearish tone.
Near term, Forexlive highlighted that price has been oscillating around the 100- and 200-bar moving averages on the 5-minute chart, and a sustained drop back below those levels could set up another test of the session low around 1.40387. The outlet also noted the Bank of Canada rate decision is forthcoming, with associated comments and expectations potentially influencing the currency outlook.