- The US dollar rallied a bit during the early hours here on Monday but looks as if it's just kind of hanging out just above the 1.3750 level.
- This is an area that's been important previously. And of course, also features the 50 day EMA.
- The 50 day EMA is offering a little bit of support and it's probably worth noting that the market had been somewhat sideways for a couple of days ahead of this.
- If we get a little bit of a push during the Tuesday session, then we could go looking to the 200 day EMA near 1.3882.
CPI on Tuesday
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That being said, Tuesday is the consumer price index announcement in America expected to come in and 0.3 % month over month for core CPI. If it comes in hotter than that, the US dollar wall must certainly take off against the Canadian dollar as it could very well have the Federal Reserve staying tight for longer than traders expect.
On the other hand, if the CPI numbers come in lighter than anticipated, that could send the US dollar lower as we would be breaking below the lows of the last couple of trading sessions, it's likely that we would see sellers coming into the market to push this pair back down to the 1.3550 level. All things being equal, I believe that this is a market that wants to go higher mainly due to Canada and its issues.
But the next day or two might end up being very noisy as we try to figure out some of the data that the Federal Reserve will be weighing. With this, the market will be noisy on Tuesday, but we may get some clarity once those numbers come out as well. The Canadian dollar is still one of my least favorite currencies.
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