The US Dollar (USD) extended upside movement against the Canadian Dollar (CAD) on Monday, increasing the price of USDCAD to more than 1.3050 following the release of some key economic news. The technical bias remains bullish in the long run because of a higher high in the recent upside rally on daily and higher timeframes.
As of this writing, the pair is being traded near 1.3055. A support may be noted around 1.2923, the intraday low of yesterday ahead of 1.2900, the psychological number and then 1.2831, the swing low of the last major downside move.
On the upside, the pair is likely to face a hurdle near 1.3313, the horizontal resistance area ahead of 1.3639, another major horizontal resistance and then 1.4000, a key psychological number. The technical bias will remain bullish as long as the 1.2831 support area is intact.
The Consumer Price Index (CPI) for Canada rose 1.4% in the 12 months to February, after increasing 2.0% in January. Excluding gasoline, the CPI rose 1.9% year over year in February, following a 2.0% increase the previous month. Gasoline prices were down 13.1% year over year in February, contributing the most to the overall deceleration in consumer prices. The gasoline index had increased 2.1% on a year-over-year basis in January. On a monthly basis, gasoline prices were down 6.9% in February 2016, while they had increased 9.4% in February 2015.
Considering the overall technical and fundamental outlook, buying the pair around current levels could be a good strategy in short to medium term if we get a valid bullish reversal candle on the daily chart.