When are the Canadian retail sales and how could they affect USD/CAD?
|Canadian retail sales overview
Statistics Canada will publish the monthly retail sales report for the month of April later this Friday at 12:30 GMT. Consensus estimates point to a sharp deceleration in the headline sales, which is anticipated to show a 0.2% increase as compared to the previous month's solid rise of 1.1%. Meanwhile, growth in the core sales - excluding automobiles, is also seen slowing to 0.3% during the reported month as against 1.7% previous.
Deviation impact on USD/CAD
Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to be in the range of 38-43 pips in case of deviations up to +0.38 to -0.58, although in some cases, if notable enough, can fuel movements of up to 73-76 pips in the subsequent 4-hours.
How could it affect USD/CAD?
Ahead of the key release, the pair was seen struggling near multi-month lows, below the 1.3200 round figure mark. Against the backdrop of this week's hotter-than-expected Canadian consumer inflation figures, any positive surprise would be enough to provide a fresh boost to the domestic currency and open the room for the further near-term depreciating move for the major. Any subsequent slide might now turn the pair to accelerate the slide towards challenging the 1.3100 handle, though near-term oversold conditions might help limit further losses.
Alternatively, a disappointing report might prompt traders to cover their short positions and lift the pair back towards the previous multi-month lows support breakpoint, now turned support near the 1.3235 region. Any further recovery might confront some fresh supply and remain capped near the very important 200-day SMA, around the 1.3280 region.
Key Notes
• USD/CAD hangs near multi-month lows, just below 1.3200 handle
• USD/CAD Analysis: Could make U-turn north
About Canadian retail sales
The Retail Sales released by Statistics Canada is a monthly data that shows all goods sold by retailers based on a sampling of retail stores of different types and sizes. The retail sales index is often taken as an indicator of consumer confidence. It shows the performance of the retail sector in the short term. Generally speaking, the positive economic growth anticipates bullish movements for the CAD.
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