USD/CAD calm ahead of mfg. and retail sales

The Canadian dollar has gained 1.1% so far this week, but is having a very calm Friday session. USD/CAD is currently trading at 1.3235, up 0.07% on the day. We could see some movement in the North American session, with releases on both sides of the border. Canada releases manufacturing sales, while the US publishes retail sales, a key gauge of consumer spending.

Bright forecast for Manufacturing Sales 

Canada releases the June data for Manufacturing Sales later on Friday. The manufacturing sector was hammered by Covid-19 in the second quarter, and this was reflected in manufacturing sales plummeting by 28.5% in April. However, the indicator bounced back in May, posting a gain of 10.7%. Analysts are projecting an even stronger gain of 16.4% in June. If the actual read is close to this estimate, the Canadian dollar could get a boost.

US Retail Sales expected to slow

All eyes will be on US retail sales, as this indicator is often a market-mover. Consumer spending was strong in June, as the headline figure gained 7.5% while the core reading climbed 7.3%. July is expected to post only modest gains, with a forecast of 2.0% for the headline read and 1.3% for the core release. Still, if the actual readings are within expectations, we can expect the greenback to hold its own. However, if the readings are softer than expected, USD/CAD could lose ground.

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USD/CAD Technical

USD/CAD moved slightly higher in the Asian session but then gave up these gains. The pair posted considerable losses in European trade but has steadied in North American trade.

  • 1.3321 in the next resistance line. This is followed by resistance at 1.3393
  • USD/CAD has tested 1.3204 in support. The next support line is 1.3159
  • The 10-day MA line, which is at 1.3227, remains relevant

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.