Bank of Canada's Kozicki: Big drivers in August CPI inflation was energy & gasoline prices

<p>Bank of Canada Deputy Gov. Sharon Kozicki is speaking and says:</p><ul><li>One of the big drivers in August CPI inflation was energy and gasoline prices. They can be pretty volatile</li><li>It will take a lot of time to sort through the inflation data, given what's going on underneath</li><li>Energy prices on their own, if it's temporary, is something that gets much less weight because we are concerned about the underlying inflation</li></ul><p>The USDCAD fell ahead of the CPI, and shortly after the CPI data today, but then started a rebound higher. </p><p>Looking at the 5 minute chart below, that rebound took the price back up to retest its 200-bar moving average on that chart at 1.3446 (see green line on the chart below). Sellers leaned against that moving average on the first test.</p><p>It will now take a move below the 50% midpoint of the last trend leg down, and the 100 bar moving average of 1.3424 to give the sellers more control in the short term. Conversely, a move above the greenline at 1.3446 would increase the short-term bullish bias and have traders targeting the key 200-day moving average at 1.34621 (see green step line on the chart below)</p>

This article was written by Greg Michalowski at www.forexlive.com.