USD/CAD sellers turned back a buyer push into the 1.3948–1.3966 zone and dragged the pair back below its falling 100-hour moving average, putting the 100-day moving average at 1.39186 back in focus. A softer-than-expected July US PPI report added pressure on the dollar, reinforcing the case for a more moderate July PCE inflation reading.
Sellers are back in control of USD/CAD after defending a key resistance zone and pushing the pair back below its falling 100-hour moving average. The pair now sits within reach of the 100-day moving average, the level that could open the door to a deeper decline.
Buyers fail at the 1.3948–1.3966 swing area
The pair moved lower yesterday, and sellers pushed USD/CAD below its 100-day moving average at 1.39186, but the downside momentum could not hold. Price snapped back toward its falling 100-hour moving average and a swing area between 1.3948 and 1.3966.
Buyers then tried again today, extending the pair into that same 1.3948–1.3966 zone. However, the push failed. Sellers leaned against the resistance, stalled the advance, and turned the price back down.
In early North American trading, USD/CAD moved back below its falling 100-hour moving average, currently at 1.39383. That shift puts the short-term technical bias back in favor of sellers, with the 100-day moving average at 1.39186 as the next hurdle.
Getting below that level is not enough on its own — sellers broke it briefly yesterday but could not stay there. They need to get and stay below 1.39186 to build bearish conviction and open the way toward the 1.3900 natural support level and the 50% midpoint of the broader move.
Soft PPI data adds pressure on the dollar
The dollar side of the pair also weakened after the July US PPI report came in softer than expected. Headline PPI was unchanged at 0.0% month-over-month, below the 0.2% increase expected, while the annual rate rose 4.7%, below the 4.9% forecast and down from 5.5% in June.
Core PPI, excluding food and energy, rose 0.2% month-over-month against a 0.3% estimate, and the annual core rate matched expectations at 4.2% but slowed from 4.7% previously. Goods prices fell 0.7% in July, while services prices rose 0.2%.
Combined with the prior day's benign CPI report, the softer PPI points toward a more moderate July PCE inflation reading later this month, since components of both reports feed into the Fed's preferred inflation gauge. The initial reaction was modestly negative for the dollar, as the report eases some pressure on the Fed to tighten policy in September — expectations for a September hike slipped to 32.4%.
Source: Investinglive
Trading involves risk.
Risk Disclaimer
