On Friday, the Canadian dollar has posted small gains. In the North American session, USD/CAD is trading at 1.2136, down 0.22% on the day.

Canada releases Manufacturing Sales will be released later in the day (12:30 GMT). This is an important indicator and should be treated as a market mover. The February reading hit a 6-month low, at -1.6%. However, analysts are predicting a strong rebound for March, with a consensus of +3.5%. If the release is within expectations, we could see the Canadian dollar respond with gains.

The US releases retail sales for April (12:30 GMT), with small gains expected after the sharp gains recorded in March. Month-on-month, retail sales is expected at 1.0%, while core retail sales is projected at 0.5%.

Fed says no change in policy

After the surge in US consumer inflation, producer price inflation also outperformed. PPI for April rose 0.6%, double the estimate of 0.3%. This could have fanned the fears of higher inflation, but the Fed has activated a charm offensive, with speakers hammering home the message that there will be no change in monetary policy anytime soon.

The markets appear to have internalized the message, as treasury bonds and the US dollar have dipped, while equities are higher. Still, if upcoming US data is strong, investors could again become jittery about inflation. The Fed has insisted that inflation risks are transitory, and that it is premature to talk about reducing its massive stimulus programme, even with the recovery well underway. However, if the next inflation report also points to high inflation, the Fed may find that the market is more skeptical about its stance that inflation is nothing to worry about.

USD/CAD technical


  • USD/CAD faces resistance at 1.2277 and 1.2427.

  • There is support at 1.2052. Below, there is support at 1.1977.

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 OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Feed news

Latest Forex Analysis

Latest Forex Analysis

Editors’ Picks

EUR/USD loses 1.21 as the dollar extends its gains

EUR/USD has dipped below 1.21, some 70 pips down on the day as the dollar recovers alongside Treasury yields. US Consumer Sentiment beat estimates with 86.4 points. 


GBP/USD retreats amid UK GDP miss, reopening concerns

GBP/USD is hovering around 1.4150, down on the day. UK GDP missed with 2.3% in April and a four-week delay to Britain's reopening is speculated. The greenback is gaining some ground.


XAU/USD drops back below $1900, as US dollar rebounds ahead of data

Gold price has retraced below the $1900 mark once again, having tested Tuesday’s high near $1903. The latest leg down in gold price comes on the back of a tepid bounce staged by the US dollar, as the Treasury yields trim losses across the curve.

Gold News

Ethereum price prepares for a bullish weekend, targeting $3,000

Ethereum price seems prime to revisit $3,000. Although ETH faces resistance at $2,300, the upswing seems imminent. A downswing below $2,000 could invalidate the bullish thesis. 

Read more

Hot Inflation is warming the seat for the June FOMC

Americans are seeing the fastest price increases since their seventh-graders were born as inflation builds into the US economy from the disruptions of the pandemic lockdowns. Core CPI at 3.8% is the steepest gain in 29 years.

Read more