USDCAD is correcting in a narrow range

The USDCAD currency pair is correcting in a narrow range due to mixed macroeconomic data and geopolitical instability.

Published data on Tuesday showed that US retail sales in September increased by 0.7% compared to the previous month, exceeding analysts' expectations, who predicted a 0.3% increase. The same month brought a 0.3% increase in US industrial production, which also beat experts' expectations.

Meanwhile, Federal Reserve Bank of Philadelphia (FRB) Governor Patrick Harker said the central bank should stop raising the benchmark interest rate because America's small businesses are being hit hard by monetary tightening. His counterpart at the FRB Richmond, Tom Barkin, suggested that the US economy may be less robust than previously forecast, which is helping to reduce inflationary pressure.

Meanwhile, Canada's inflation rate fell from 4% to an annualized rate of 3.8% in September. This was reported by the Bureau of Statistics of Canada. The agency notes that in September the growth in food prices slowed down, amounting to 5.8% in annualized terms, while in August this figure was at 6.9%. At the same time, the growth of prices for gasoline and diesel fuel continues to persist. In September it amounted to 7.5% year-on-year.

In March, Deputy Prime Minister and Minister of Finance of the North American country Chrystia Freeland assured Canadians that the inflation rate in the country by the end of the year could fall to 2.6%.

Based on consumer price data, market participants see an 84% chance that the Canadian central bank will leave its benchmark rate unchanged at 5% at the monetary policy meeting on October 25. Positive inflationary dynamics has already had a positive impact on the value of the Canadian currency.

In terms of wave analysis, the USDCAD pair price is forming the third ascending wave on the H1 timeframe. Breaking through the top of the first wave at 1.3700 will strengthen the price movement towards growth.

Signal:

The short-term outlook for the USDCAD pair is to buy.

The target is at the level of 1.3780.

Part of the profit should be fixed near the level of 1.3700.

A Stop-loss should be placed near the level of 1.3565.

The bullish trend is of a short-term nature, so it is suggested to limit the trading volume to no more than 2% of your capital.