Today we have the release of the Canadian CPI. Currently, the Canadian dollar (CAD) appears overvalued, with commodities heading downwards on the increasing tensions in Iraq. The Bank of Canada is also expected to maintain their dovish stance, reluctant to tighten monetary policy before interest rate decisions in the U.S., further indicating a limited upside for the CAD.
Trading Event: Canadian CPI 1230 GMT
- First quarter GDP fell below expectations to 1.2%.
- Retail sales fell by 0.1% in April, while the unemployment report remained soft, with a decrease in full-time positions.
- From a technical perspective, USD/CAD is testing a key support level at 1.0812.
- Canadian CPI is forecasted to show a 0.2% rise when compared with the same time last year and no change when compared with last month’s result of 0.2%.
- Banc De Binary analysts predict that there will be downside pressure to the Canadian dollar, indicating a potential upward movement in the USD/CAD.