USD/CAD fell more than a half-cent after core Canadian inflation rose much faster than expected in August.
Core CPI rose 2.1% compared to the 1.8% consensus. The market initially moved higher because headline CPI was in-line with expectations at 2.1% but the core later took over and the pair plunged to 1.0910 from 1.0960.
Technically, the fall splashes a head and shoulders pattern on the hourly USD/CAD chart.
USDCAD head and shoulders
The other level to watch is the the 200-day moving average at 1.0914.
I’d be cautious until we get an hourly close below that neckline and the 200-dma.
