Canadian dollar boosted by better than expected retail sales data

Slobodan Drvenica Windsor Brokers

USDCAD

Canadian dollar rallied to the session lows at 1.2554 against the greenback after data. Retail sales in Canada rose by 0.6% in May, well above expected 0.2% rise.
At the same time, inflation came along with expectation at -0.1% in June m/m, while annual inflation slowed to 1.0%, the lowest since Oct 2015, holding well below central bank’s target at 2.0% .
Better than expected retail sales results supported Lonnie which remains in steep uptrend against the US dollar since early May.
Technicals remain firmly bearish for USDCAD pair and favor final push towards 1.2459 (03 May 2016 low), as descend from 1.3793 (05 May low) has nearly fully retraced 1.2459/1.3793 ascend.
Sustained break below 1.2459 would trigger significant downside and expose targets at 1.2159 (50% retracement of 0.9631/1.4688 ascend and psychological 1.2000 support in extension
Meanwhile, corrective action on strongly overextended daily studies could be anticipated ahead of 1.2459 but no firmer bullish signals being generated so far.
Falling 10SMA marks initial resistance (currently at 1.2700) ahead of descending 20SMA (1.2859).
Res: 1.2600; 1.2640; 1.2700; 1.2741
Sup: 1.2539; 1.2500; 1.2459; 1.2363

Interested in USDCAD technicals? Check out the key levels

1. R3 1.2741
2. R2 1.2691
3. R1 1.2640
PP 1.2591
1. S1 1.2539
2. S2 1.2490
3. S3 1.2438

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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