USDCAD with upside momentum

USDCAD with upside momentum
The USDCAD pair traded in a tight range on Friday, ignoring today's US labor market data. At the time of writing, it was seen at 1.27, but the medium-term uptrend seemed intact.
Earlier today, data showed that the US inflation rose +6.8% YoY - right as expected according to the CPI indicator. It was the fastest rate of increase since 1982. In addition, the core CPI jumped 4.9 YoY, meeting expectations, its highest since 1991.

Still, the Fed funds futures are now fully pricing in a rate hike by the June meeting, alongside more than 70% chance of one by the May meeting (and almost three full rate-hikes priced-in by the end of 2022).

From other news, the University of Michigan sentiment survey rose from 67.4 to 70.4 in preliminary December data, and both current conditions (74.6 vs. 73.6 prior and 73.5 expected) and Expectations (67.8 vs. 63.5 last and 62.5 expected) jumped notably.

The USDCAD pair retested previous highs and lows at 1.26 and bounced off from that level, keeping the medium-term trend bullish. As long as the USD remains above that level, the short-term outlook also seems bullish.

The next resistance and target for bulls are in the critical zone of 1.28, where a multiple top pattern is. The USD must rise above it to confirm the long-term uptrend. 

Alternatively, a decline below 1.26 might lead to a drop toward the 50-day average (purple line) at 1.2540. The following support is at the 200-day average (green line) at 1.2470.
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