The Canadian CPI and retail sales will be reported at 8:30 AM with the expectations for some continued weakness (-0.6% MoM NSA, 1.6% YoY, but YoY 2.3% vs 2.1%). Retail sales are expected to fall by -0.2% for the headline and +0.1% for the ex auto. The Bank of Canada surprise move this week was insurance in case the oil fall really hurts. This data should not help.
![USDCAD monthly chart.](http://az705044.vo.msecnd.net/20150123/2015-01-23_8-06-42-650x363.png)
USDCAD monthly chart.
The USDCAD is making yet a newer high in pre-data trading. On Wednesday when the Bank of Canada cut, the pair moved above the 200 month moving average at the 1.2325 level (this is now a risk, defining level). Yesterday, the market consolidated, but found support around that 1.2325 level (the low extended to 1.2312, but only briefly – see hourly chart below). On the monthly chart, the next main target comes in against the 50% retracement of the move down from the 2002 high to the 2007 low. That level comes in at 1.2626. That level is still down the road a bit.
Looking at the hourly chart, the 1.12393 was the high from the interest rate cut day. The market yesterday and today toyed above and below the line – finding support against a trend line below (see chart below). Just before the last surge higher, however, the price based off that line before extending to new highs. This level will now the close support for traders. Below that keep an eye on the lower trendline which currently comes in at the 1.2370 level.
On the topside, adding a topside channel trendline targets 1.2485. Seeing that the price is trading at the highest level going back to 2009, there is not much in the way of upside projections. The buyers remain in complete control. However, traders do like to trade within channels. So I would expect that if the train continues to push higher, this might be an area to look for a pause (at least on a temporary basis).
Risk is increased through the data, but the buyers still remain in control. Watch the dips for that continued interest
![USDCAD continues the surge higher.](http://az705044.vo.msecnd.net/20150123/2015-01-23_8-12-46-650x363.png)
USDCAD continues the surge higher.