USD/CAD tumbles to lows on upbeat retail sales

The Canadian Dollar is now picking up pace vs. its American neighbour, dragging USD/CAD to the area of daily lows in the 1.2560/50 band.

USD/CAD offered post-data

CAD derived further buying interest after Canadian retail sales surprised investors to the upside in May, expanding at a monthly 0.6%, while sales stripping the Autos sector contracted 0.1% inter-month.

Additional data showed inflation figures tracked by CPI rising at an annualized 1.0% in June and contracting 0.1% on a monthly basis, both prints matching expectations. Core consumer prices gauged by the BoC rose in line with forecasts 0.9% YoY and 0.1% MoM.

In the meantime, spot is on its way to close the fourth consecutive week with losses, shedding more than 9% since YTD tops in the boundaries of 1.3800 the figure seen in early May to current levels in the mid-1.2500s.

The shift to a more hawkish tone from the Bank of Canada largely stays as the main driver behind CAD appreciation, relegating US-CA yields spread and crude oil dynamics to a secondary role.

USD/CAD significant levels

As of writing the pair is retreating 0.27% at 1.2552 facing the next support at 1.2540 (2017 low Jul.20) followed by 1.2458 (2016 low May 3) and then 1.2124 (monthly low Jun.18 2015). On the flip side, a breakout of 1.2699 (10-day sma) would aim for 1.2836 (23.6% Fibo of 1.3795-1.2540) and then 1.2880 (21-day sma).