The USDCAD surged in early US trading after data showed Canada’s inflation rate dipped in April.
Annualized figure dipped to 2.2% in April, missing forecast for 2.3% which was also last month’s result.
On the other side, Canada’s retail sales climbed in March, as 0.6% rise overshot expectations for 0.3% increase while previous month’s figure was revised upward to 0.5% from 0.4%.
However, better than expected retail sales were not able to improve negative impact from weak inflation numbers, as the greenback remains well supported and accelerated across the board at the beginning of the US session.
Fresh strength surged through thick 4-hr cloud and probes through double-Fibonacci barrier at 1.2896 (Fibo 61.8% of 1.3124/1.2527 fall and Fibo 61.8% of 1.2997/1.2729 bear-leg), close above which would generate bullish signal for renewed attack at psychological 1.30 barrier after initial attempt stalled just ticks ahead on 08 May.
Today’s rally broke above converged 10/20/55SMA’s, bringing daily MA’s into full bullish configuration.
Strengthening 14-d momentum broke into positive territory and adds to bullish outlook.
Cluster of MA’s at 1.2846/33 zone marks solid support which is expected to protect the downside.
Res: 1.2927; 1.2974; 1.3000; 1.3076
Sup: 1.2863; 1.2846; 1.2833; 1.2791
