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USDCAD is lower on the day, but getting a modest lift after another higher inflation reading
The USDCAD has seen plenty of up-and-down price action this week, but one message has been consistent: buyers have struggled to sustain momentum near the highs for the year.
The highs from October 5 and October 9 established a ceiling near 1.4292–1.4298. Monday’s high fell short at 1.4286. On Wednesday, the stronger-than-expected CPI data gave buyers another opportunity to push higher, but the rally stalled at 1.4298.
From there, the price rotated lower and closed back below the 100- and 200-hour moving averages near 1.4244.
Go figure. Stronger inflation. A lower USDCAD.
Yesterday’s higher-than-expected PPI data did not turn the tide either. Instead, the pair extended its decline, breaking below a key floor between 1.41922 and 1.4204.
Technical levels do matter. The buyers could not get through the ceiling. Once the moving averages and floor gave way, sellers had more control.
A longer-term support area gives buyers a place to lean
The selling continued today, taking the price into a swing area between 1.41297 and 1.4153.
That area supported the pair from mid-June into mid-July and also lines up with swing highs from November 2025. Today’s low reached 1.4146, putting the price inside that support zone.
The import/export price data provided another sign of inflation pressure—and another opportunity for traders to buy the US dollar.
Take a look at these concerns.
- Fuel and lubricants: +34.5%. Natural gas rose 96.5%, although its small weight—roughly 0.3%—limits its overall influence.
- Industrial supplies and materials: +20.4%.
- Unfinished metals: +25.3%; finished metals: +18.5%.
- Industrial supplies excluding fuels: +13.0%.
- Nonelectrical machinery: +10.4%; capital goods: +8.4%.
- Imports excluding food and fuels: +6.2%.
Food, autos and consumer goods are comparatively less troublesome: annual increases were 2.9%, 1.1% and 2.7%, respectively.
Import takeaway: The persistent concern is the cost of equipment and production inputs. Energy explains September’s biggest jump, but it does not explain away the broader inflation pressure.
The USD is finding a bid. The difference this time?
Although the USD moved lower on the CPI and the PPI, today we are seeing a modest bid. Why? The USDCAD had already moved lower from its highs for the year and reached an established technical support area. Buyers now have a level against which to define their risk.
The question is whether they "can hold the support?".
A move back above 1.4153, followed by an ability to stay above it, would strengthen the case for a bounce. While the price remains inside the zone, buyers and sellers are still battling.
The lower boundary at 1.41297 is the key downside risk level. Stay above it, and buyers retain an opportunity to build a recovery. Move below it and stay below, and another layer of support gives way, opening the door for further selling.
What would a recovery need to clear?
On further upside momentum, the targets come in at:
1.41922–1.4204: The broken floor. Prior support becomes potential resistance.
1.4223: The falling 100-hour moving average.
1.4233: The falling 200-hour moving average.
Holding support is a start. Getting back above those resistance levels would provide evidence that buyers are taking back control.
The trading lesson: Prepare before you trade
Hotter inflation data can give traders a reason to buy the dollar. It does not guarantee that the price will move higher—or stay higher.
This week, buyers had their opportunities near the highs and could not sustain the momentum. Today, they are trying again from a different technical location: support.
For traders, that creates a framework. Know where support is. Know what would invalidate the bounce. Know where the next resistance levels could stall a recovery.
In the video above, I detail the technical levels in play and show why they matter.
You need to prepare for your trade. Not just trade.
This article was written by Greg Michalowski at investinglive.com. -
Morning Kickstart: Dollar falls despite hot inflation. USDJPY slips below key moving averages
The US dollar continues its move to the downside today despite the hotter US CPI and PPI reports this week. Treasury yields are also higher this morning, but the greenback is struggling to attract buyers.
In the morning video above, I take a look at the three major currency pairs—EURUSD, USDJPY and GBPUSD—from a technical perspective. For each pair, I outline the bias, the risk-defining levels and the targets that would give either the buyers or sellers more control.
The disconnect between the inflation headlines and the dollar’s direction is worth watching. Stronger inflation would normally offer support through expectations for tighter monetary policy. However, traders still need to see that fundamental story reflected in the price action. This morning, the dollar is mostly moving the other way.
Dollar lower against six of seven major currencies
The dollar’s largest decline is against the NZD, followed by the AUD. USDJPY is the exception, holding a marginal gain on the day even after retreating from its highs earlier this week.
From the dollar’s perspective:
Against the NZD: down approximately 0.82%.
Against the AUD: down approximately 0.56%.
Against the CHF: down approximately 0.50%.
Against the GBP: down approximately 0.49%.
Against the EUR: down approximately 0.34%.
Against the CAD: down approximately 0.23%.
Against the JPY: up approximately 0.02%.
AUDUSD is trading near 0.6958, rebounding after the weaker Australian employment report and yesterday’s fall.
The recovery is a reminder that the initial reaction to an economic release is only part of the story. Sellers need follow-through to keep control. When that selling stalls and the price starts recovering, traders need to reassess their risk.
Ueda keeps the weak yen and inflation in focus
Bank of Japan Governor Kazuo Ueda is on the wires saying policymakers are watching the weak yen in terms of inflation.
His other remarks indicate that the timing and pace of future rate increases will depend on developments including foreign exchange, AI-related demand and the Middle East. He described economic and price developments as broadly consistent with the BOJ’s forecasts and reiterated that financial conditions remain accommodative.
A weaker yen can raise import costs and add to domestic price pressures. That keeps the currency relevant to the BOJ’s policy decisions—and keeps traders sensitive to comments about further tightening.
USDJPY falls below its converged hourly moving averages
USDJPY moved higher earlier this week but fell just short of the September 24 high.
The buyers had their shot. They could not get through that prior peak, and the subsequent retreat has taken the price back below the nearly converged 100- and 200-hour moving averages near 158.23.
With the pair trading around 158.01, that moving-average area becomes the close risk for sellers.
Stay below 158.23 is more bearish and keeps sellers in control against that area.
Move back above—and stay above—and the downside break loses some of its significance.
On the downside, today’s low near 157.80 is the first reference point. A break below would extend the session’s range and give sellers additional confirmation.
(see video)
When the 100- and 200-hour moving averages converge, they create a relatively clear decision area. Traders can lean against that area with risk defined and limited. The next move is uncertain, but the level that would weaken the trading idea is identifiable.
Currency ranges: USDJPY has the most room to extend
The session ranges compared with the displayed 22-day average ranges show different conditions across the three major pairs:
EURUSD: 1.1209 to 1.1269 — approximately 60 pips, or 92% of its 65-pip average range.
USDJPY: 157.80 to 158.18 — approximately 38 pips, or 38% of its 101-pip average range.
GBPUSD: 1.1268 to 1.1349 — approximately 81 pips, or 111% of its 73-pip average range.
USDJPY has covered the smallest share of its average range, leaving the most room to extend relative to recent trading conditions.
EURUSD has completed most of a typical day’s range, while GBPUSD has already exceeded its average. That does not mean either pair has to stop moving. The average is a guide to the day’s activity, not a ceiling.
US stock futures are mixed
US futures show modest weakness in the Dow, a small gain in the S&P and a larger decline in the Nasdaq:
Dow futures: down 10.69 points.
S&P 500 futures: up 8.4 points.
Nasdaq futures: down 96 points.
The mixed performance leaves technology shares lagging heading into the North American session.
Treasury yields move higher
US Treasury yields are higher, with the longer maturities showing the larger increases:
2-year: 4.7571%, up 0.61 basis points.
5-year: 4.9166%, up 1.96 basis points.
10-year: 5.1103%, up 2.33 basis points.
30-year: 5.4518%, up 2.38 basis points.
The 10-year yield is back above 5.10%, but the rise in yields has yet to translate into broad dollar strength this morning. Despite the stronger PPI yesterday, yields moved lower. Go figure.
European equities mostly higher
Germany’s DAX: 25,585.68, up 0.80%.
France’s CAC 40: 7,951.61, up 0.21%.
UK FTSE 100: 10,830.91, down 0.09%.
Spain’s IBEX 35: 19,318.91, up 0.74%.
Italy’s FTSE MIB: 49,732.12, up 0.34%.
Gold, silver and Bitcoin edge higher
Gold is trading near $4,177.92, up approximately 0.17%. Silver is near $57.80, up approximately 0.74%.
Bitcoin is trading near $82,656, up approximately 0.64%.
What is ahead in North American trading?
The US calendar brings another inflation reading, followed by an update on industrial activity:
8:30 AM ET: September import prices.
9:15 AM ET: September industrial production and capacity utilization. Industrial production is expected to rise 0.4%, following an unchanged reading in August.
Import prices add another piece to the inflation picture after this week’s CPI and PPI reports. Industrial production will help show whether activity is holding up alongside those price pressures.
For the dollar, the reaction matters. Stronger data needs to attract sustained buying to change the current direction.
EURUSD: Buyers push toward the session high
EURUSD is trading near 1.1256, toward the upper end of its range. The session high near 1.1269 is the immediate upside reference.
A break above that high would extend the recovery. If buyers cannot get through, the focus shifts to whether they can maintain control on a rotation lower. In the video, I outline the technical support levels that help define that risk.
GBPUSD: An above-average move higher
GBPUSD is trading near 1.1338, close to its session high at 1.1349.
The pair has already exceeded its average daily range. That gives context to the size of the move, but it does not provide a sell signal by itself. Sellers still need a technical reason to enter, and buyers need to hold support to maintain control.
In the video, I define those decision points for GBPUSD and EURUSD, along with the important 158.23 moving-average area in USDJPY.
This article was written by Greg Michalowski at investinglive.com. -
Chart of the day: 10-year Treasury yields hit reverse this week but the real test is still ahead
Seeing as to how the bond market is faring to end the week, you probably wouldn't have guessed that we actually got hotter-than-expected inflation data from both the US CPI and PPI reports in the past few days. In fact, you might even think it was the opposite. Yet, here we are.
10-year Treasury yields are down to 5.09%, poised for back-to-back weekly declines for the first time since June. That is certainly keeping things interesting with yields tumbling back to draw in the 5.00% mark again as broader market sentiment turns more cautious.
The rejection this week at 5.30% following the US CPI report stands out rather clearly, with yields failing to sustain a break higher before retreating sharply. And that now puts the spotlight back on the 5.00% level, which had previously played the role in keeping yields from breaking out back in September.
As such, it would require a firm daily close below 5.00% to deliver a stronger signal that the recent upward momentum is starting to unravel.
After which, that could open up a move towards 4.70%, where the 100-day moving average (red line) is also sticking nearby at 4.73%. Further below, the 200-day moving average (blue line) around 4.50% could come into consideration.
But for now, it's baby steps first. I wouldn't be too quick to call an end to the broader uptrend just yet.
10-year yields are still comfortably holding above the key 5.00% threshold in the past few sessions. And any semblance of a rebound back towards 5.20% or even 5.30% again would put the recent rejection back to the test.
And from a fundamental standpoint, nothing much has really changed. Inflation pressures are still holding up and the same structural factors underpinning yields since last month are also still very much in place. Heavy Treasury issuance and concerns about the long-term trajectory of US debt are key reasons why investors are demanding more compensation to hold longer-dated government bonds.
But at least for the time being, all eyes are turning back to the 5.00% mark as the line in the sand. Hold above and we're still talking about the upward pressure in yields being sustained for the most part. But break below, and this could turn the sharp pullback this week into something more meaningful perhaps.
This article was written by Justin Low at investinglive.com. -
USDCHF backs away from key daily resistance. Sellers push toward an important hourly floor.
The USDCHF moved to a new high yesterday going back to May 2025, but the buyers ran into a key technical target on the daily chart.
The 50% midpoint of the move down from the 2025 high comes in at 0.8400. Yesterday’s high reached approximately 0.83944, just short of that midpoint. Sellers leaned against the level, and the price rotated lower.
The buyers had their shot at extending the rally. They could not get through the next major target.
That gives the sellers a level to define risk against on the daily chart. That level remains going forward. Stay below 0.8400, and there is room for a further corrective move lower. A move above—and the ability to stay above—would be needed to open the door for another extension to the upside.
The daily chart puts the pullback in perspective
Although the rejection is meaningful, the daily chart also shows that the USDCHF has made progress to the upside over recent months. The price moved above its 100-day and 200-day moving averages and worked its way through prior swing levels.
The question now is how much of that progress the buyers can hold.
Below the current price, the 38.2% retracement of the broader decline is at 0.82116. That sits near the upper end of a daily swing area between approximately 0.81706 and 0.82148.
That area becomes important if the selling gathers momentum. Below it, the rising 100-day moving average near 0.81156 provides another longer-term reference.
However, before getting to those daily targets, there are closer levels on the hourly chart that will help tell the story.
The hourly chart shows sellers taking back control
Looking at the hourly chart, the decline from yesterday’s high has taken the price back below several technical levels.
The price fell through the swing area at 0.83415–0.83480, moved below the converged 100-hour and 200-hour moving averages near 0.8320, and then broke below another swing area at 0.82908–0.82971.
Those breaks have shifted the short-term bias toward the sellers.
The latest move lower has brought the price into another well-defined swing area between 0.82636 and 0.82740. That zone has acted as both resistance and support since mid-September. It is a level traders have paid attention to before, and they are paying attention to it again.
With the price trading near the lower boundary, the pair is sitting on the edge.
Hold the floor—or open the door for more selling
For buyers looking to slow the decline, this is an area to make a stand. Holding the lower boundary and getting back above 0.82740 would be a first step toward stabilizing the price.
However, buyers would then need to reclaim 0.82908–0.82971, followed by the hourly moving averages near 0.8320, to take back more control.
Conversely, a break below 0.82636, with momentum and the ability to stay below, would open the door toward 0.82243–0.82250. That area combines the hourly chart’s 38.2% retracement of the recent rally with a prior swing level.
Below that, attention would turn toward the daily support around 0.82116–0.82148.
The sellers have earned more control on the hourly chart. Now they need to get through the next floor.
The trading lesson: Let the daily chart set the stage and the hourly chart define the risk
The daily chart explained where the rally could run into trouble: the 50% midpoint near 0.8400.
The hourly chart then showed how the balance shifted as the price broke below swing areas and its moving averages.
Neither chart guarantees the next move. Together, however, they give traders a roadmap.
At 0.82636–0.82740, buyers have a defined area to defend. Sellers have a defined floor to break. Watch what the price does there, and then look for the next shove.
This article was written by Greg Michalowski at investinglive.com. -
USDCAD sellers make a break for it and fail. What next technically?
The USDCAD has been on a rollercoaster rid of the last few days (see chart below).
A day after testing its highest level of the year—and its highest since April 2025—the USDCAD rotated lower as sellers leaned against the highs.
That selling pushed the price below a floor that had held since September 30 between 1.4192 and 1.4204. The break took the pair to a session low of 1.4171, but the momentum quickly faded. Within the same hourly bar, the price recovered back into the swing area and subsequently pushed toward its upper boundary.
The sellers had their shot below the floor. They missed.
That gives buyers an incentive to probe higher. However, the recovery has yet to generate much momentum above 1.4204. Buyers have an opening, but they still need to prove they can take control.
What would give the buyers more control?
The first requirement is to get and stay above 1.4204. A sustained move above that level would open the door toward:
1.42205: The swing highs from the last three trading days.
1.42416: The converged 100- and 200-hour moving averages.
Those moving averages would be another important test. Getting above the floor is one victory. Getting above both moving averages would strengthen the buyers’ case.
What would put the sellers back in play?
A move back below 1.4192, followed by an ability to stay below it, would tilt the short-term bias lower again. That would bring the following downside targets into focus:
1.4171: Today’s low.
1.4130–1.41532: The next lower swing area, with 1.41532 encountered first.
The trading lesson: A failed break needs follow-through
When price breaks an established floor, sellers need it to stay below that floor and extend lower. A quick recovery suggests the downside break failed to attract enough follow-through selling.
But a failed bearish break does not automatically put buyers in control. The recovery needs confirmation too.
For the USDCAD, 1.4192–1.4204 remains the decision area. Stay above 1.4204, and buyers have a stronger case for further upside. Move back below 1.4192 and stay below, and sellers deserve the benefit of the doubt again.
Sellers had their shot. They missed. Now the buyers need to get and stay above 1.4204 to make that failure count.
This article was written by Greg Michalowski at investinglive.com.