- Canadian Dollar up in the market despite lower crude oil prices.
- US dollar weakens further during US session and after better-than-expected US data.
The USD/CAD pair rose earlier today to test recent daily highs but found resistance at 1.2620 and turned to the downside. Recently printed a fresh daily low at 1.2569, above last week lows. It was hovering slightly above the lows, holding a bearish tone.
The decline took place despite a better-than-expected reading on US March retail sales. Sales rose 0.6% in above the 0.4%. It was the first gain after three consecutive monthly losses. “Consumer spending has been disappointing in 1Q18, which is partially weather-related, but today’s report suggests the slowdown was transitory. We remain upbeat for the coming months. Consumer confidence is high, supported by strong employment gains, rising wages and tax cuts”, said analyst James Knightley, Chief International Economist at ING.
After the beginning of the US session, the greenback dropped further against the Canadian dollar and erased gains versus NZD and AUD.
Key events for the week in Canada, include the central bank meeting on Wednesday. “The Bank of Canada is the only G10 central bank that has a policy meeting in the week ahead. The uncertainties, largely emanating from the United States, seems to be the major deterrence to a rate hike now. However, the Bank of Canada does want to remove additional accommodation, and a move in Q3 remains a likely scenario”, wrote analysts at BBH. Regarding economic indicators, on Friday is due data on inflation and retail sales.
USD/CAD Technical levels
To the downside, support levels might lie at 1.2545/40 (Apr 11 low), 1.2520 and 1.2500. To the upside, immediate resistance is seen at 1.2620/25 (Apr 11 high) and 1.2675.
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