Should We Watch the Direction of the Canadian Dollar Following a Sharp Drop in Canada’s CPI?
21.02.2024
- UK Public Sector Net Debt
- U.S. MBA Mortgage Applications Index
In U.S. currency trading yesterday, the Canadian dollar plummeted against the yen after Canada’s January Consumer Price Index, released yesterday, showed a sharp year-over-year decline from 3.4% the previous month to 2.9%. The CAD/JPY pair fell from 111.432 to 110.669.It broke below the 200-period SMA on the hourly chart. On the 4-hour chart, the 75-period MA is acting as a support level, and the pair has rebounded during today’s Asian trading session, so traders should watch for a potential price reaction during U.S. trading hours.
European currencies saw the euro become the strongest currency during U.S. trading hours after yesterday’s release of the Eurozone’s December construction output data showed a year-over-year improvement from the previous month’s -2.2% to +1.9%.The euro rose against the U.S. dollar from 1.0761 to 1.0838. The currency broke above the 200-day simple moving average (SMA) on the daily chart. Since the daily RSI is showing an upward trend at 48.5, we will be watching closely to see if further gains will follow.
Today’s economic indicators include Japan’s trade balance (customs-based) at 8:50, Australia’s wage index at 9:30, the UK’s net public sector debt at 16:00,Turkey’s Consumer Confidence Index at 16:20, Indonesia’s 7-day reverse repo rate at 17:00, South Africa’s Consumer Price Index at 21:00, the U.S. MBA Mortgage Applications Index at 22:00, remarks by U.S. Atlanta Fed President Bostic at 22:00,Atlanta Fed President’s remarks; at 27:00, the U.S. 20-year Treasury auction; and at 28:00, the release of the U.S. FOMC minutes. We will be closely monitoring the direction of the Canadian dollar, which fell sharply following a significant drop in Canada’s CPI.
Author: Keisuke Sakurai
