Intraday bias - Bearish
USDCAD is consolidating after a massive sell-off on Friday. The upbeat Canadian jobs data has increased the chance of further rate hikes by the BOC. Markets eye US CPI data for further direction. It hits a low of 1.33297 and is currently trading around 1.33405.
According to the CME Fed watch tool, the probability of a 25 bpbs rate hike in Feb declined to 90.8% from 96.70% a day ago.
The US 10-year yield pared some of its gains ahead of US CPI data. Any break above 3.78% confirms minor bullishness. The yield spread between 10 and 2-year widened to -81.8 basis points from -46 bpbs.
Technically in the 4-Hour chart, the pair is holding below the short-term( 21- EMA), 55 EMA, and the long-term moving average of 1.34233 (200- EMA). Any violation below 1.3300 confirms further bearishness. A dip to 1.3260/1.3220 is possible.
WTI crude oil declined slightly ahead of US CPI data. Any daily close above $80 will push oil prices up to $85.
The near-term resistance is around 1.3380 and any breach above targets is 1.3435/1.3470/1.3520.
Indicators (4-Hour chart)
CCI (50)- Bearish
ADX- Bearish
It is good to buy on dips around 1.3350 with SL around 1.3300 for a TP of 1.3525.
