• USD/CAD declined on Tuesday as Canadian dollar rose as stronger-than-expected inflation data reduced bets on further Bank of Canada rate cuts.
• Canada's annual inflation rate rose to 2.0% in October, up from 1.6% in September, surpassing the 1.9% forecast, as gas prices dropped less than in the previous month.
• Money markets now see a 23% chance the Bank of Canada will cut interest rates by 0.5% at its next policy meeting on December 12, down from 38% before the inflation data.
• Immediate resistance is located at 1.4038(Daily high), any close above will push the pair towards 1.4091(23.6%fib).
• Support is seen at 1.3971(38.2%fib) and break below could take the pair towards 1.3952( (14SMA).
Recommendation: Good to sell around 1.3990, with stop loss of 1.4100 and target price of 1.3920
