USDCAD topped out at C$1.3236.........>

DOLLAR-CANADA: USDCAD topped out at C$1.3236 yesterday, before a sharp

retracement followed back through C$1.32. Rate has largely settled in the middle

of its weekly range, holding around the 200-dma at C$1.3161. Up trendline

support off the Sep 2018 low comes in today at C$1.3120, a level which also

holds the 61.8% fibo of C$1.2783-1.3665. Bulls need to recover C$1.32, putting

focus back on broken trendline support-turned-resistance at C$1.3255, ahead of

the 100-dma at C$1.3261.

- Main highlights from today's Canadian CPI at 1330GMT which is expected to tick

down noticeably in January to 1.4% y/y from 2.0% previously. RBC economists

project just a 0.1% monthly advance in headline CPI in January, with the YoY

rate falling 0.6pp to 1.4%. A further deterioration in gas prices (from -8% to

-14% y/y) and a partial reversal of December's 21.7% m/m airfares increase are

behind the latter. 

- A reminder that Westpac have put out a trade recommendation to buy USDCAD at

C$1.3180, targeting C$1.3365 and a stop at C$1.3105.