USD/CAD Price Picks Momentum Near 1.3375, Eying US CPI

• The bias remains bullish as long as it stays above the median line (ml).
• Higher inflation should lift the greenback.
• A new higher high activates further growth.

The USD/CAD price is trading in the green at 1.3374 at the time of writing. The pair is struggling to stay higher despite temporary retreats. The US dollar dropped a little in the short term.

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On Tuesday, the US data came in better than expected, while yesterday, the Final Wholesale Inventories matched expectations.

Today, the US inflation figures should have a major impact. The volatility should be high, leading to consolidation amid uncertainty. The FED is expected to deliver a 75-bps rate cut during the year as inflation decreased.

Still, the Consumer Price Index m/m is expected to report a 0.2% growth in December versus a 0.1% growth in November; the CPI y/y could be reported at 3.2% above 3.1% in the previous reporting period, and the Core CPI may announce a 0.3% growth for the second consecutive month. Higher inflation should force the Federal Reserve to maintain its monetary policy. This scenario could lift the greenback.

In addition, the Unemployment Claims data will be released as well. Tomorrow, the US publishes the PPI and Core PPI figures, so the volatility could remain high.

USD/CAD Price Technical Analysis: Retesting Midline

The USD/CAD price found strong resistance at the ascending pitchfork’s upper median line (uml). It has also failed to take out the 50% (1.3397) retracement level.

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Now, it has dropped below the median line (ml) but it has failed to stay below it, signaling exhausted sellers already.

The bias remains bullish as long as it stays above this dynamic support. The current retreat could represent a flag pattern. This could announce an upside continuation. Though, only a new higher high activates more gains ahead.

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• Source: https://www.forexcrunch.com/blog/2024/01/11/usd-cad-price-picks-momentum-near-1-3375-eying-us-cpi/