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.

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