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USD/CAD Tanks Afer US and Canadian Data

Today we had some US and Canadian Data points. 

US CPI m/m (Sept): 0.1%
Forecast: 0.0%
Previous: -0.2%
US Core CPI m/m (Sept): 0.1%
Forecast: 0.2%
Previous: 0.0%

From Canada:
Retail Sales m/m (Aug.): -0.3%
Forecast: 0.1%
Previous: -01%
Core Retail Sales (Aug.): -0.3%
Forecast: 0.2%
Previous: -0.5%
The Bank of Canada also met to vote on monetary policy and decided to hold the benchmark interest rate to 1.00%. It its official statement, the BoC said that,

"the Bank judges that the risks to its inflation projection are roughly balanced. Meanwhile, the financial stability risks associated with household imbalances are edging higher. Overall, the balance of risks falls within the zone for which the current stance of monetary policy is appropriate and therefore the target for the overnight rate remains at 1 per cent." 

Nothing out of the ordinary here. Very neutral and conventional statement that reflects a wait and see mode.

Now, the USD/CAD initially rallied after the rise in US CPI data and the unexpected dip in the Canadian retail sales data. We saw price rally in the 1H chart from around 1.1220 to about 1.1290. 

USD/CAD 1H Chart 10/22
(click to enlarge)

In the 1H chart, we can see that this broke above a falling wedge pattern, signaling bullish continuation. However, after the BoC statement, it did an about-face, falling into new lows on the year. 

This false break to the upside is potentially a bearish signal for the USD/CAD. If we get a pullback, price holding below 1.1250 should maintain a bearish outlook. Above 1.1250, the market remains choppy without a sense of direction, though the prevailing trend is bullish and intact, so we should maintain a bullish preference.