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Canada CPI and Retail Sales Data; USD/CAD Reaction

Statistics Canada released CPI inflation and Retail Sales data today. 

CPI inflation growth in July came in at -0.2%, missing forecast of a -0.1% reading. June's print was 0.1%. The core CPI growth came in at -0.1%, which missed average forecast of 0.1%. June's print was -0.1%. Despite the leveling of inflation in the June and July, CPI growth on the year in July came in at 2.1%, still above the 2.0% target by the Bank of Canada. 
Inflation has been trending up in the past year, but the latest data suggests there will be some leveling off in Q3. 
Retail sales in June grew 1.1% on the month, beating forecasts for around a 0.3% reading. The May reading was 0.9%, upwardly revised from 0.7%. The core reading in June grew 1.5% on the month, beating the 0.4% forecast. May's reading was 0.3%, upwardly revised from 0.1%. Compared to June 2013, retail sales grew 5.9%.
Retails sales data reflect strong demand to end Q2. With prices leveling off, it might not be as strong in July, but on the year, demand has been trending up and seems sustainable as it is across the board in categories and regions. 
USD/CAD had some mixed reactions since the release of the data. While the retail sales data was much stronger than expected, it is not as timely as the inflation data, which was softer than expected. A couple hours after the release, we see that the market is slightly CAD-bullish, but USD/CAD is still indecisive.
USD/CAD 4H Chart 8/22

(click to enlarge)

The 4H chart shows a market that is essentially neutral-bullish. It has been neutral in August because it traded in a range between 1.0860 and 1.0986. It has bullish bias because the prevailing trend is bullish, and some of the bullish indications from the moving averages and the RSI remains intact.

The central pivot of the August range is around 1.0920. If price can hold north of this area, USD/CAD should maintain a bullish bias even within the consolidation. Then a break above 1.0986 would open up the 1.0150 highs from April. 

A break below 1.09 however might put pressure back toward 1.0860. A break below 1.0860  would then open up a bearish outlook. Otherwise, the market remains neutral-with varying degrees of bullish bias, depending on whether price holds north of 1.0920.