THE CANADIAN DOLLAR IS STRENGTHENING AHEAD OF INFLATION REPORT

The USD/CAD price showed a sharp downward impulse yesterday and as a result approached the support level of 1.3200 and the lower boundary of the local rising corridor.

In the case of breaking through these levels, we may see a continued decline to the next targets of 1.3165, 1.3050 and 1.2980. In the case of a rebound, prices may restore previously lost positions and hit the closest resistance levels at 1.3300 and 1.3350.

The reasons for the strengthening of the Canadian dollar were the depreciation of the greenback, the upward correction of oil prices that usually has a significant influence on the USD/CAD, and the strong data on retail sales in Canada, the growth of which accelerated to 0.8% in April compared to 0.5% in March. The average forecast was at 0.3%.

Today there is also a possibility of increased volatility due to the publication of important data on consumer price index in Canada at 12:30 GMT. In the US, services PMI statistics will be released at 13:45 GMT and new home sales for May at 14:00 GMT. The possibility of oil price growth due to profit taking after a strong fall and ahead of the weekend may also lead to a decline for the USD/CAD.