Today, market participants are waiting for the publication (at 12:30 GMT) of fresh inflation data in the US. In May, consumer inflation is expected to rise by 0.7% and remain at the level of 8.3% in annual terms, which indicates its still high level (highs for graying for 40 years). If the data turns out to be weaker than the forecast, then the dollar is likely to react with a short-term decline. Data better than the forecast will strengthen the dollar.
Also at the same time (at 12:30 GMT), Statistics Canada will publish data on the country's labor market for May, and at 14:00 the University of Michigan Consumer Confidence Index (preliminary release) will be published, reflecting the confidence of American consumers in the economic development of the country.
Thus, during the period from 12:30 to 14:00 (GMT), a significant increase in volatility is expected in the USD, CAD quotes and, accordingly, in the USD/CAD pair.
If the Canadian labor market data expected today also turns out to be strong, then the Canadian dollar, which is now declining against the US dollar, may receive additional support, and the direction of the USD/CAD pair may change from “north” to “south” again.
From a technical point of view, from the level of 1.2740, where USD/CAD is currently located, a rebound is possible and a return to the zone below the key support level 1.2675 with the aim of further decline at the support levels 1.2628, 1.2540, 1.2520 (local support level).
Support levels: 1.2715, 1.2675, 1.2628, 1.2600, 1.2540, 1.2520, 1.2460, 1.2400, 1.2290, 1.2165, 1.2010, 1.2000
Resistance levels: 1.2740, 1.2800, 1.2840, 1.2900, 1.2960, 1.3000, 1.3070, 1.3100
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