Weak retail sales have little impact
Retail sales were much weaker than expectations - falling by -1.7% vs. -0.8% estimate. If auto's were excluded sales fell by -0.8% vs. -0.5% estimate. This weak data comes on the back of a -1.8% and -2.0% declines for the two measure in December. Back to back big declines.
Typically, the USDCAD would rally on such week data, and initially the price did in fact move to the upside. However, resistance above against the 200 and 100 hour moving average (blue and green line in the chart above), and probably more importantly, a tumbling US dollar put a halt to the rise. Rising oil prices, have also helped contribute to the higher Canadian dollar.
Looking at the hourly chart, the price is approaching the next target against the 61.8% retracement of the move up from the post FOMC low to the high reached yesterday. That level comes in at 1.25649. There is also a swing high at the 1.2565 level going back to March 2, and a swing low from March 9 at 1.2573. Will this area find support buyers? Key test for the USDCAD.
