USD/CAD bounces up from 1.3450 after downbeat Canadian Retail Sales
- The Canadian Dollar loses ground as Canadian Retail Sales disappoint.
- Retail consumption declined 0.2% in November against market expectations of a flat reading.
- Longer-term, the US Dollar maintains its positive trend from late December lows intact.
The US Dollar nudged higher on Friday, following an unexpected decline in Canadian Retail sales. The pair bounced up from intra-day lows near 1.3450 although it remains negative on the daily chart.
Retail consumption declined 0.2% in Canada in November, against expectations of flat performance, following a downwardly revised 0.5% increase in the previous month. Excluding autos, sales of all other products fell 0.5%, beyond the 0.1% contraction expected.
Beyond that, Statistics Canada reported that the amount of employment insurance beneficiaries rose by 1.7% in November. This is the largest increase since August and adds to evidence that the Canadian economy is losing momentum.
Later today the US Michigan Consumer Sentiment Index is expected to show a moderate improvement before a speech of the San Francisco Fed President, Mary Daly, which will close the week.
USD/CAD Technical Analysis
The US Dollar is correcting lower following a sharp rally in the previous three weeks. The broader trend, however, remains positive, with the bullish cross on 4h SMAs adding credence for bulls.
Support levels are the mentioned 1.3450 and the 38.2% Fibonacci retracement of January;’s rally, at 1.3410. Resistances are at 1.3500 area and 1.3545.
Technical Levels to Watch