Bank of Canada Deputy Gov. Sharon Kozicki is speaking and says:
- One of the big drivers in August CPI inflation was energy and gasoline prices. They can be pretty volatile
- It will take a lot of time to sort through the inflation data, given what’s going on underneath
- Energy prices on their own, if it’s temporary, is something that gets much less weight because we are concerned about the underlying inflation
The USDCAD fell ahead of the CPI, and shortly after the CPI data today, but then started a rebound higher.
Looking at the 5 minute chart below, that rebound took the price back up to retest its 200-bar moving average on that chart at 1.3446 (see green line on the chart below). Sellers leaned against that moving average on the first test.
It will now take a move below the 50% midpoint of the last trend leg down, and the 100 bar moving average of 1.3424 to give the sellers more control in the short term. Conversely, a move above the greenline at 1.3446 would increase the short-term bullish bias and have traders targeting the key 200-day moving average at 1.34621 (see green step line on the chart below)