This Wednesday, Statistics Canada is scheduled to release the most recent Consumer Price Index Data for October.
Investors hope to see indications for an observed recovery in Canada’s price stability, as the CPI has reportedly decreased by a total of 0.50 per cent in August and September.
Canada CPI m/m. Image source: TradingEconomics.com
The prevailing forecasts for October project the CPI to increase by 0.3 per cent, which would measure a marginal improvement from September’s 0.4 per cent tumble.
The overall inflation rate is currently recorded at 1.9 per cent, which is close to, but slightly off, the Bank of Canada’s symmetric 2 per cent target rate.
Canada Inflation Rate. Image source: TradingEconomics.com
The marginal change of the inflationary pressures that is projected for Wednesday is not expected to affect the overall inflation rate in Canada, which is anticipated to remain unchanged at the current 1.9 per cent.
As a result, the Canadian dollar is likely to gain momentum against the other major currencies.
The short-term momentum of the USDCAD appears to be changing towards having a distinctly bearish outlook.
The pair had recently exhausted its bullish trend on the 1H chart, and after forming a Distribution range between 1.32667 and 1.32377, the price looks ready to establish a new bearish downtrend.
The price is likely to tumble to the 1D’s 23.6 per cent Fibonacci retracement level before finding support there at 1.31355
USDCAD 1H Price Chart. Image source: Trendsharks ©, created with TradingView.com
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