#USDCAD @ 1.34168 Loonie rises across the board after Canadian inflation data. (Pivot Orderbook analysis)

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• Loonie rises across the board after Canadian inflation data.
• US Retail Sales rise below expectations in April.
• USD/CAD drops to lowest since Thursday, under 1.3430.

The pair currently trades last at 1.34168.

The previous day high was 1.3568 while the previous day low was 1.3459. The daily 38.2% Fib levels comes at 1.3501, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3526, expected to provide resistance.

The USD/CAD dropped from 1.3455 to the 1.3410 area following the release of US and Canadian economic data. The Loonie is among the top performers of the day in the currency market.

In Canada, data released on Thursday showed the Consumer Price Index (CPI) rose to 4.4% on a yearly basis in April from the 19-month low of 4.3% in March, and against expectations of a decline to 4.1%.

“Inflation now lies well above the April MPR’s implied forecast of 4.0% y/y, and while the top-line story on core inflation may provide some reassurances to the BoC, the underlying story is one of further evidence that policy may not be tight enough to bring inflation down to its 2% target over a reasonable horizon. The risks continue to build for a BoC hike later this year, especially if Q1 growth figures surprise sharply to the upside”, commented analysts at TD Securities.

The Loonie rose across the board after the CPI, hitting fresh daily highs. At the same time, data from the US triggered a mixed reaction to the Greenback. US Retail Sales rose 0.4% in April, below the 0.7% market consensus, but March figures were revised upward from -1% to -0.7%.

The USD/CAD is falling sharply for the second day in a row and is approaching the 1.3400 level. A break below this level could expose the next support area seen around 1.3360/70. A daily close below this area could open the door for a test of the monthly low at 1.3310/15.

The immediate resistance for the pair is the 1.3455 area. If the it rallies above this level, it would alleviate the current bearish pressure.

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.3417 at the time of writing. Pair opened at 1.3466 and is trading with a change of -0.36 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.3508, 50 SMA 1.3566, 100 SMA @ 1.3513 and 200 SMA @ 1.3464.

The previous day high was 1.3568 while the previous day low was 1.3459. The daily 38.2% Fib levels comes at 1.3501, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3526, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.3428, 1.3389, 1.3319
• Pivot resistance is noted at 1.3536, 1.3606, 1.3645

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