Weaker-than-expected US Consumer Price Index (CPI) data released yesterday triggered a downward correction in the US dollar. The USD/JPY pair lost more than 150 points in just a couple of hours, USD sellers in USD/CAD managed to push the price below 1.4400, and European currencies partially recovered earlier-formed reversal patterns for buying.
USD/JPY
On the daily timeframe, the USD/JPY pair has broken out of a three-week consolidation range of 158.40–156.20. If sellers manage to secure the price below the lower boundary of this range, further downward movement towards 154.50–154.00 is possible. A resumption of the upward trend may occur if the price returns above 156.20.
Events likely to influence USD/JPY pricing include:
- 16:30 (GMT+2): US Core Retail Sales Index
- 16:30 (GMT+2): Initial Jobless Claims in the US
- 16:30 (GMT+2): Philadelphia Fed Manufacturing Index (US)
USD/CAD
A retest of the critical resistance level at 1.4450 proved unsuccessful for USD/CAD buyers. The rejection from this level resulted in a 120-point decline, leading the pair back to the 1.4300 zone. Technical analysis of USD/CAD suggests a sideways movement. Currently, the pair could decline to the 1.4300–1.4280 area. If the pair rebounds from this zone, price strengthening towards 1.4450–1.4400 is possible.
Events that may trigger a breakout from the USD/CAD flat range include:
- 16:15 (GMT+2): Canadian Housing Starts
- 20:30 (GMT+2): Speech by Bank of Canada Deputy Governor Gravel
- Tomorrow at 16:30 (GMT+2): Foreign Investment in Canadian Securities
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 data released yesterday triggered a downward correction in the US dollar. The USD/JPY pair lost more than 150 points in just a couple of hours, USD sellers in USD/CAD managed to push the price below 1.4400, and European currencies partially recovered earlier-formed reversal patterns for buying.){kind=link}