USD/CAD higher as retail sales rebound

USD/CAD has posted considerable gains on Wednesday. Early in the North American session, the pair is trading at 1.3458, down 0.55% on the day. There are no US events on the day.

 

Canada retail sales rebound but miss forecast

Retail sales numbers in April were nothing short of a disaster, as consumer spending plunged. Retail sales plunged by 26.4%, while the core reading fell by 22.0%. The lockdown has since eased in Canada, and this was reflected in the May numbers. The headline reading bounced back with a strong gain of 10.6%, but this was shy of the estimate of 11.9%. It was a similar pattern for the core figure, which climbed 18.7%, short of the forecast of 20.2%. Investors liked what they saw, as USD/CAD has improved by 0.6o% on Tuesday.

On Wednesday, we’ll get a look at Canada inflation data for June. Consumer inflation gained 0.3% in May, after back-to-back declines. Still, this reading missed the estimate of 0.8%. The estimate for June stands at 0.4%. If the actual reading beats the forecast, we could see the Canadian dollar continue to rally.

 

USD/CAD Technical

USD/CAD has recorded losses in the Asian and European sessions.

  • 1.3433 is an immediate support level. Below, we find support at 1.3365
  • 1.3507 is the next line of resistance, followed by resistance at 1.3554
  • USD/CAD broke through the 10-day MA on Monday. This is a bearish signal and the pair has continued to gain ground on Tuesday.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.