USDCAD: NFP Surge Sets Stage for CPI Showdown

Attention Traders,

In tomorrow's trading session, our focus is on USDCAD, with a strategic eye on a potential buying opportunity around the 1.35700 zone. Currently, USDCAD was trading in a downtrend and successfully managed to break it out, currently is approaching the retrace area at 1.35700.

Augmenting our analysis with a fundamental layer, recent Non-Farm Payrolls (NFP) data emerged robust, surpassing expectations with 303k jobs added compared to the forecasted 212k. This positive economic indicator underscores the strength of the US labor market, potentially influencing future monetary policy decisions.

Looking ahead, the upcoming Consumer Price Index (CPI) data slated for Wednesday assumes pivotal importance. If CPI figures reveal a significant uptick, signaling heightened inflationary pressures, it could serve as a catalyst for further Federal Reserve hawkishness.

Such a scenario, where CPI data exceeds expectations, may reinforce expectations of tighter monetary policy from the Federal Reserve. This could include measures like interest rate hikes or tapering of asset purchases, bolstering the US Dollar and potentially driving upside momentum in USDCAD.

As savvy traders, it's crucial to remain attuned to both technical and fundamental factors shaping market dynamics. By incorporating these insights, we aim to navigate tomorrow's trading session with prudence and insight.

Best wishes for successful trading endeavors!