USD/CAD dives sharply in early US session after data release.
From US, durable goods orders rose 3.1% in February, above expectation of 1.7%.
Ex-transport orders rose 1.2% versus expectation of 0.5%.
However, markets response to Canada inflation data seems to be much stronger.
From Canada, CPI rose 0.6% mom, 2.2% yoy in February, beat expectation of 0.5% mom, 2.0% yoy. Annual rate also accelerated from prior month’s 1.7% yoy.
CPI core common accelerated to 1.9% yoy, up from 1.8% yoy. CPI core media rose to 2.1% yoy, up from 1.9% yoy. CPI core trimmed rose to 2.1% yoy, up from 1.8% yoy.
Canada retail sales rose 0.3% versus expectation of 1.2% mom in January. Ex-transport order, though, met expectation and rose 0.9% mom.
USD/CAD drops sharply and is set to test on yesterday’s low at 1.2828. Rejection from 55 H EMA certainly carries near term bearish implication. However, there is a key support zone ahead at 1.2802 cluster support zone (38.2% retracement of 1.2246 to 1.3124 at 1.2789). For the moment, we’d still expect strong support from there to bring rebound.
