USD/CAD Week Ahead: US & Canadian CPI Data to Drive Price Action

USD/CAD enters a pivotal week with both US and Canadian inflation data scheduled for Tuesday's release, likely to create significant volatility in the pair currently trading near 1.3650. The Canadian CPI is expected to show a slight moderation to 2.7% YoY from 2.9%, while US CPI forecasts suggest inflation remains sticky at 3.1% YoY. These releases will be crucial for central bank policy expectations, with the Bank of Canada potentially moving closer to rate cuts if inflation continues cooling, while persistent US inflation could support Fed hawkishness. Technical levels show immediate resistance at 1.3700 and support at 1.3600. Additional US data throughout the week, including retail sales and jobless claims, will provide further direction. Traders should prepare for heightened volatility Tuesday through Friday, with the inflation differential between the two economies likely determining USD/CAD's near-term trajectory.