CPI Release Will Boost The CAD

CPI Release Will Boost The CAD

2023-11-21 • Updated

Canada's forthcoming Consumer Price Index (CPI) data, set for release on Tuesday, is projected to show a year-on-year decline in inflation to 3.2% for October from the previous 3.8%. This potential inflation dip might offer leeway for the Bank of Canada (BoC) to maintain its overnight rate target at 5.0% in the December meeting, aligning with the central bank's emphasis on economic indicators influencing rate decisions. Concurrently, the US Dollar (USD) confronts challenges amid an increased appetite for risk, fueled by expectations of a dovish stance from the Federal Reserve (Fed). The recent release of subdued inflation figures last week, with the Consumer Price Index (CPI) easing to 3.2% (YoY) and the core CPI to 4.0% (YoY), has led investors to reconsider the likelihood of a December rate hike and contemplate potential rate cuts in 2024.

EURCAD - D1 Timeframe

EURCADDaily-2111.png

EURCAD has currently reached the supply zone on the Daily timeframe and given an initial reaction from the supply zone. This move here is expected to slide prices down all the way to the marked demand zone as shown on the chart. 

Analyst’s Expectations: 

Direction: Bearish

Target: 1.51121

Invalidation: 1.47910

NZDCAD - D1 Timeframe

NZDCADDaily-2111.png

In line with what we had on the EURCAD chart, NZDCAD is currently reacting from the supply zone with a confluence from the trendline resistance. Considering that the supply zone is currently at the 88% of the Fibonacci retracement, I’ll be anticipating to go short.

Analyst’s Expectations: 

Direction: Bearish

Target: 0.80727

Invalidation: 0.84285

CADJPY - D1 Timeframe

CADJPYDaily-2111.png

CADJPY on the Daily timeframe has just broken below the trendline and seems to be heading back up for a retest. There is also a supply zone that intersects the trendline and could be a good spot for the commencement of a sell move.

Analyst’s Expectations: 

Direction: Bearish

Target: 105.432

Invalidation: 109.535

CONCLUSION

The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.

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