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USDCAD : Trading Steady Despite Downbeat Inflation Data

USDCAD : Daily Chart

USDCAD is trading steady even after the downbeat Inflation data released today. Seems like investors are not ready to accept that the economy is not recovering and expecting a hawkish view on economy from Fed. 

The official data today showed that the U.S. consumer price index fell .2% in August, pulling the annual rate of inflation down to 1.7% from 1.9% in July. 

Fed is expected to cut its stimulus program by another $10 billion which would result in the winding up of the program in October. Canadian dollar yesterday found support from the upbeat manufacturing sales data and therefore the pair declined from the resistance trend line of the channel. It broke down below the support at 1.0987 which earlier acted as resistance. Currently the pair is testing another key support at 1.0946.

The 50 day SMA is moving towards the 200 day SMA and might cross above it signaling an uptrend.

USDCAD : 4 Hour Chart

On the 4 hour chart, the pair seems supported by the key support at 1.0946 and the two SMA which are 100 day and 200 day SMA. The pair might again bounce back from this support level.