USD/CAD breaks above 1.3805 on stronger US PPI data

USD/CAD surged 0.5% to 1.3820 after US Producer Price Index data exceeded expectations, showing a 0.9% monthly gain in July. The pair broke above key technical resistance levels, including the 100-day moving average at 1.3774 and this week's prior high at 1.3805. Earlier selling pressure at the 100-bar moving average on the 4-hour chart (1.3752) failed to contain bullish momentum as traders reacted to the inflation data. The stronger-than-expected PPI reading has reduced expectations for aggressive Federal Reserve rate cuts, supporting dollar strength. Technical momentum suggests further upside potential with immediate resistance at 1.3850, while support has shifted to the broken 1.3805 level. The breakout above multiple moving averages signals a potential trend reversal, with traders now eyeing upcoming US CPI data for confirmation of persistent inflationary pressures.