USD/CAD has been in a non-volatile bearish trend since the start of the week. On Monday BOC Gov. Council member Welkins spoke about emerging signs of economic growth including adjustment of lower oil prices and a recovery in the industrial sector and labor market. Canada is going for economic diversity and benefits can be already seen. Today we do not have any economic events from Canada, but tomorrow the manufacturing sales report is due for release. It is expected to show a decrease to 0.9% from 1.0% previously. At the same time, the United States will post the monthly CPI report which is expected to be unchanged at 0.2% and Core CPI which is expected to increase to 0.2% from 0.1% previously. Besides, the Core Retail Sales is also scheduled for release. The consensus forecast calls for a decrease to 0.2% from 0.3% previously. The retail sales volume is expected to decrease to 0.1% from 0.4% previously and crude oil inventories are likely to show a deficit of -2.3M which previously was at 3.3M. Thus, it is going to be a busy day in the United States today, so a good amount of volatility is expected to hit the market. However, the loonie is likely to extend gains against its American counterpart in the coming days.
Now let us look at the technical view. The price has bounced off the resistance at 1.3540 on Friday and currently the market is impulsively bearish. Yesterday the price broke below the support at 1.3260, so further bearish move towards 1.3000 is expected in the coming days. As the price remains below 1.3540, the bearish bias is expected to continue further.
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