Today, Canada released inflation data.CPI m/m (August): 0.0%Forecast: -0.1%Previous -0.2%Core CPI m/m (August): 0.5%Forecast: 0.2%Previous -0.1% (CAN inflation; source: Statcan) CPI on the year to August increased 2.1%, which was the same as July's reading. The core index, the one that the Bank of Canada focuses on, "advanced to 2.1% in the 12 months to August, after increasing 1.7% in July." This can have some hawkish implication for the BoC, as the core inflation rate is back above the target 2.0%. But this is just one month of data, and any CAD-strength might be short-lived.The USD/CAD shows that traders are indeed buying up the loonie after the stronger-than-expected inflation data. USD/CAD fell from 1.0980 to 1.0886 immediately following the release, confirming a break below September's rising trendline. This also broke below the cluster of 200-, 100-, and 50-period SMAs in the 4H chart, and is pushing the 4H RSI below 40. We also see a completed head and shoulders pattern. (USD/CAD 4H Chart 9/19) However, when we look at the daily chart, we can see that there is still a key support just below 1.09. There is a rising trendline from July, and the cluster of the 200-, 100-, and 50-day SMAs. The daily RSI is still holding above 40 after tagging 70, showing maintenance of the bullish momentum. If price breaks below these support factors, one final challenge will be the 1.0810-1.0830 August-September lows and previous support in May and June. A break below that opens up a bearish outlook. If price can hold above 1.09, the bullish outlook is still in good shape. If we think about it, does this CPI have implication strong enough to derail USD/CAD's bullish outlook? Maybe we should conserve the bullish outlook to hold under 1.11 for now, but we should probably NOT turn bearish yet. (USD/CAD Weekly Chart 9/19)