USD/CAD shrugs as retail sales impress

The Canadian dollar continues to show limited movement. Currently, the pair is trading at 1.3053, down 0.15% on the day. There are no US economic releases on the schedule.

Canada retail sales sparkle

Canada ended the trading week in style, as retail sales for September were much stronger than expected. Headline retail sales jumped 1.1%, up from 0.4% beforehand. Core retail sales also impressed, climbing from 0.5% to 1.0%. Analysts had projected much weaker figures, with forecasts of 0.2% for the headline figure and 0.0% for core retail sales. Despite the strong numbers, the Canadian dollar has only managed small gains on Friday.

Will consumers continue to keep the purse strings open? The Covid-19 pandemic has caused tremendous economic damage, and there are serious concerns that a resurgence of Covid could have a severe impact on the normally robust Christmas shopping season. With the Canadian economy taking tenuous steps in recovery, a disappointing Christmas could spell trouble for the economy and the Canadian dollar.

Canada ADP nonfarm payrolls show contraction

The Canada ADP Nonfarm Employment Change report continues to show declines in job creation. The October reading came in at -79.5 thousand, marking a third straight decline. Still, this was considerably better than the September release of -240.8 thousand. The ADP releases, which are derived from actual ADP payroll data, have been much weaker than the official employment releases. Employment Change for October showed a gain of 83.6 thousand, which was down from 378.2 thousand, but still higher than expectations. We’ll get a clearer picture of the strength of the labor market in the first week of December, with the release of Employment Change.

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USD/CAD Technical

  • There is weak support at 1.3040. Below, there is a support line at 1.3011
  • We find resistance at 1.3110, followed by resistance at 1.3151
  • USD/CAD continues to press downwards on the 10-day MA line. If this lines breaks, it would be an indication of a downturn for the pair

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.
Kenny Fisher

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