BOC In Focus As Traders Await CAD CPI

CPI on WatchOn the back of a surprise rate hike from the BOC this month, the latest round of Canadian CPI data will be closely watched today. Along with hiking rates by a further .25%, the BOC signalled that further tightening might still be necessary but would depend on the path of incoming inflation. With that in mind, today’s data will be used as a gauge for whether the BOC is likely to hike again next month or return to keep rates on hold.Further Cooling ExpectedLooking at the figures for today, the market is expecting the monthly CPI reading to cool to 0.4% from 0.7% prior. Median CPI annually is expected at 4% from 4.2% prior while trimmed CPI is expected at 3.9% from 4.2% prior. If we see data satisfying these expectations, this should keep CAD lowered on reduced expectations of a further hike next month. However, should we see any stickiness in the figures, especially any surprise upside, this will likely drive hawkish expectations, sending CAD higher near-term.Technical ViewsUSDCADThe reversal lower in USDCAD has seen the market breaking down through several key support levels. Recently, the pair has broken below the 1.3280 level, which is a major support zone. While below here, the focus is on a further push lower and a test of next support at the 1.2962 level next.