The USD/CAD moved lower today on mixed Canadian economic data and imminent Spanish bailout sent traders fleeing the U.S. dollar into the Lonnie.  Economic data reports out today showed Canada’s Core Consumer Price Inflation (Core CPI) climbed inline to analysts’ expectations of 0.3% higher after previous month’s decline.

Overall Consumer Price Inflation (CPI) moved high less than expected by 0.2% compare to the consensus 0.4%.

However, Wholesales Sales for Canada fell more the expected to in July by 0.6%. Analysts were looking for a small decline of 0.1%.

USD/CAD Bottom Line

Price action formed a morning star last week Thursday, Friday and this week Monday with no real test of the candlestick formation until now.  Price action places today’s low about 50% pullback test on the formation bouncing off the T3 Tilson trendline and the near term upward trendline suggesting price may want retest the previous high now resistance at the 0.9914 level. Since we are still in a downward Fibonacci wave we want to wait for price to break upward trendline for next wave down to the 61.8 extension at 0.9411.  Once price action breaks and close below the trendline we want to look for bearish candlestick patterns on the lower timeframe charts.  Until then we are in wait and see mode going into the weekend.

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