“As expected” Canadian CPI data disappoints USD/CAD traders
There was no “beat” of expectations as in the US and UK, and as a result, the Canadian Dollar sold off vs the US Dollar
Share this:
As traders already know, inflation has been running hot these last few months! Recent inflation data from the US and the UK both beat already high expectations. The Canadian October CPI headline print was hot as well, at 4.7% YoY vs 4.4% YoY in September. This was the highest reading since February 2003! In addition, the Core CPI YoY for October was 3.8% vs 3.7% in September, the highest level in 30 years! As a result, one would expect USD/CAD to be tanking, as stronger inflation in Canada should lead to a stronger Canadian Dollar, especially with the BOC ending their bond buying program at their last meeting. However, expectations were for the headline CPI to be 4.7% and the Core CPI to be 3.8%, therefore there was no “beat” of expectations as in the US and UK. As a result, the Canadian Dollar actually sold off vs the US Dollar on the release of the data.
Trade USD/CAD now: Login or open a new account!
On a 15-minute chart, USD/CAD immediately moved higher on the release of the data. Price moved from 1.2549 to 1.2595 within a few minutes, a move to 46 pips!
Source: Tradingview, Stone X
USD/CAD had already been moving higher since price pulled back to the to 1.2288 in late October as Crude Oil (orange line) was making new highs near $85. The pair paused near the 200 Day Moving Average and horizontal resistance between 1.2530 and 1.2599, respectively. However yesterday, USD/CAD formed a bullish engulfing candlestick on the daily timeframe, indicating higher prices could be ahead.
Source: Tradingview, Stone X
On a 240-minute timeframe, not only was there horizontal resistance at the recent highs, but it was also the 61.8% Fibonacci retracement from the highs on September 29th to the lows on October 21st, near 1.2589. Notice too, that on October 21st price broke higher out of a descending wedge. The target for a descending wedge is a 100% retracement. In this case the target is 1.2775. If price closes above 1.2604 on a daily timeframe, there is little standing in the way from price moving to the target. However, the first target should be 1.2715, which is the target for the AB=CD pattern.
Source: Tradingview, Stone X
If price holds the 1.2604 level (negating the bullish engulfing candle) and breaks below 1.2492, it will have formed a double top on a short-term timeframe. The target would be near 1.2380. Horizontal support ahead of the target is 1.24324. Below there, price can retrace to the October 21st lows at 1.2288.
Higher CPI from Canada may result in an increase in interest rates sooner than expected, as Canada has already ended it bond buying program. However, “as expected” CPI from Canada resulted in a selloff in the Loonie today, as traders were hoping for more!
Learn more about forex trading opportunities.
As traders already know, inflation has been running hot these last few months! Recent inflation data from the US and the UK both beat already high expectations. The Canadian October CPI headline print was hot as well, at 4.7% YoY vs 4.4% YoY in September. This was the highest reading since February 2003! In addition, the Core CPI YoY for October was 3.8% vs 3.7% in September, the highest level in 30 years! As a result, one would expect USD/CAD to be tanking, as stronger inflation in Canada should lead to a stronger Canadian Dollar, especially with the BOC ending their bond buying program at their last meeting. However, expectations were for the headline CPI to be 4.7% and the Core CPI to be 3.8%, therefore there was no “beat” of expectations as in the US and UK. As a result, the Canadian Dollar actually sold off vs the US Dollar on the release of the data.
Trade USD/CAD now: Login or Open a new account!
• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
On a 15-minute chart, USD/CAD immediately moved higher on the release of the data. Price moved from 1.2549 to 1.2595 within a few minutes, a move to 46 pips!
Source: Tradingview, Stone X
USD/CAD had already been moving higher since price pulled back to the to 1.2288 in late October as Crude Oil (orange line) was making new highs near $85. The pair paused near the 200 Day Moving Average and horizontal resistance between 1.2530 and 1.2599, respectively. However yesterday, USD/CAD formed a bullish engulfing candlestick on the daily timeframe, indicating higher prices could be ahead.
Source: Tradingview, Stone X
On a 240-minute timeframe, not only was there horizontal resistance at the recent highs, but it was also the 61.8% Fibonacci retracement from the highs on September 29th to the lows on October 21st, near 1.2589. Notice too, that on October 21st price broke higher out of a descending wedge. The target for a descending wedge is a 100% retracement. In this case the target is 1.2775. If price closes above 1.2604 on a daily timeframe, there is little standing in the way from price moving to the target. However, the first target should be 1.2715, which is the target for the AB=CD pattern.
Source: Tradingview, Stone X
If price holds the 1.2604 level (negating the bullish engulfing candle) and breaks below 1.2492, it will have formed a double top on a short-term timeframe. The target would be near 1.2380. Horizontal support ahead of the target is 1.24324. Below there, price can retrace to the October 21st lows at 1.2288.
Higher CPI from Canada may result in an increase in interest rates sooner than expected, as Canada has already ended it bond buying program. However, “as expected” CPI from Canada resulted in a selloff in the Loonie today, as traders were hoping for more!
Learn more about forex trading opportunities.
Related tags:
Latest market news
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
USD/JPY Q4 2026 Outlook: Hawkish Fed Pricing Clashes With Intervention Risk
The year-end tug-of-war is clear: hawkish Fed pricing supports USD/JPY, while intervention risk limits the upside.
USD/CAD and USD/MXN Q4 2026 Outlook: Will the U.S. Dollar Dominate North America Again?
The final stretch of 2026 is approaching, and North America's major currencies have begun to show a shift in the strength dynamics seen earlier in the year. New expectations of a more aggressive monetary policy stance, particularly in the United States, could be significantly reshaping the outlook for the region. At the same time, this backdrop, combined with potential trade tensions across North America, may become one of the most important drivers of currency performance in the months ahead.
Japanese Yen Forecast: USD/JPY 4% Rally Challenges Post-Intervention Downtrend 9 24 2026
USD/JPY momentum has shifted sharply higher, putting a major resistance confluence in focus as U.S. and Japanese event risk builds.
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.