USD/CAD has been quite bearish and corrective recently due to positive economic reports of CAD supporting the gains of the currency against USD in the existing bullish trend. USD has been the dominant currency in the pair since September despite the Rate Hike in CAD from 0.75% to 1.0%. Currently, the market sentiment is looking forward to the USD Rate Hike in December which is expected to empower the currency to gain further against CAD in the future. Today USD CPI report is going to be published which is expected to decrease to 0.1% from the previous value of 0.5%, Core CPI report is expected to increase to 0.2% from the previous value of 0.1%, Core Retail Sales is expected to decrease to 0.2% from the previous value of 1.0%, Retail Sales report is expected to decrease to 0.0% from the previous value of 1.6%, Empire State Manufacturing Index is also expected to decrease to 25.5 from the previous figure of 30.2 and Crude Oil Inventories is expected to show negative result of -2.1M from the previous positive figure of 2.2M. On the CAD side, today we do not have any upcoming economic event or report to have an impact on the market momentum, but tomorrow CAD Foreign Securities purchases report is going to be published which is expected to increase to 10.68B from the previous figure of 9.85B and Manufacturing Sales report is expected to be negative at -0.4% from the previous value of 1.6%. To sum up, both USD and CAD economic reports are forecasted to be mixed in nature whereas the market sentiment is currently leaning towards the USD side as the Rate Hike in December is quite imminent. If the economic reports of USD result better than expected then further bullish pressure with a higher target is expected in this pair against CAD in the coming days.

Now let us look at the technical view, the price has reacted to the bearish divergence recently which lead to the recent bearish pressure in the pair whereas the price is currently struggling to break above 1.2750-1.2800 resistance area which has been confluence with the 200 EMA as well. As the price remains below 1.2750-1.2800 resistance area with a daily close the bearish bias is expected to continue further.