USD remained the strongest currency in the pair while dominating CAD in the process. USD was positive amid the recent economic reports while the Fed was hawkish as the upcoming development plans indicate further gains on the USD side in the coming days.
Recently, the US Retail Sales report was published showing an increase to 0.2% from the previous value of -1.6% and Core Retail Sales also went up to 0.9% from the previous value of -2.1%. It was expected to reach 0.4%. The today's CPI report is also expected to increase to 0.2% from the previous value of 0.0%. The Fed is conducting a broad policy review which might result in the higher inflation rate, a bit more than expected. Now, the Fed is taking wait-and-see approach regarding future policy changes. The optimistic bias in the economy is expected to maintain healthy gains for USD.
On the other hand, CAD has been quite mixed in light of recent economic reports which lead to further weakness against USD. Key job data published on Friday put pressure on CAD, but after that the Canadian Dollar managed to regain certain momentum. This week on Thursday, the CAD NHPI report is going to be published which is expected to be unchanged at 0.0%. If it is worse or unchanged then further weakness of CAD will be expected in the coming days.
As of the current scenario, USD went up despite the recent mixed employment report that is expected to push the price much higher against CAD. Whereas CAD shows better results in light of the upcoming economic reports, further weakness is expected on the bearish side of the pair.
Now let us look at the technical view. The price is currently struggling at the edge of breaking above the 1.3400 area. It is expected to lead to strong bullish momentum. A break above 1.3400 with daily close will only indicate a strong impulsive momentum towards 1.35 which is an event area. On the contrary, a daily close below 1.3400 area is expected to lead the price lower towards 1.3300 and 1.3200 support area in the coming days.
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