US Dollar Drifts Ahead of CPI Release as Traders Eye Key Levels

The US dollar is experiencing a bit of drift as traders await the release of the Consumer Price Index (CPI) in the United States. Despite this, Chris, a proprietary trader with over 20 years of experience, prefers to buy the US dollar against the Canadian dollar. He believes that if the USD/CAD pair can break above the 1.3950 level after the CPI announcement, he will likely be a buyer.

Chris notes that the USD/CAD pair has been hovering near the 50% Fibonacci retracement level at 1.3901 and is currently trading at around 1.3933. He also mentions that the pair has not broken below this level, which suggests some level of support.

In addition to the USD/CAD pair, Chris also likes buying dips in the GBP/USD pair. He notes that the British pound has broken above a resistance barrier and is likely to grind higher. However, he cautions that the interest rates in the United Kingdom are elevated, which may impact the pair's trajectory.

The CPI announcement will have a significant influence on the US dollar's performance against other currencies, particularly the Canadian and Swiss francs. Chris expects a break above 0.8140 in the USD/CHF pair to be a bullish sign, indicating that he would be a buyer in this scenario.