CAD CPI Preview: what to expect of USD/CAD

Canadian inflation figures tracked by the CPI are due later today. Market consensus expects headline consumer prices to have risen at an annual pace of 1.6% during May and 0.5% inter-month. Core prices measured by the BoC are seen up 2.1% YoY and 0.3% on a monthly basis.

In the FX space, the recent USD/CAD rally seems to have run out of legs in the mid-1.3100s, as the greenback lost upside momentum in the mid-95.00s tracked by the US Dollar Index, emerging as the interim resistance in case of a positive surprise. On the way down, the first support aligns at 1.2877, where sits the 55-day sma, followed by June lows in the mid-1.2600s.