- The USD/CAD pair trades near 1.3300 on Friday start.
- The USD registered losses on Thursday but the pair couldn’t rise as Canadian manufacturing sales data was also soft.
- The 1.3310 acts as immediate resistance for the pair contrast to likely support of 1.3225.
The Canadian Dollar (CAD) trades negative versus the US Dollar (USD) to 1.3300 during the initial hours of the Asian session on Friday. The USD/CAD pair couldn’t take advantage of Thursday’s miss of the US retail sales as manufacturing sales from Canada also lagged behind market consensus. In addition to the data, uncertainty surrounding a trade pact between the US and China also affects the CAD as China is one of the largest consumers of Canada.
The US Dollar refrained to extend previous gains on Thursday after monthly retail sales figures disappointed greenback buyers with -1.2% contraction versus +0.1% forecast. The core retail sales figure (excluding automobiles from retail sales) also followed the suit by declining to -1.8% against no change expectations.
On the other hand, the Canadian manufacturing sales for the December month shrank -1.3% from downwardly revised -1.7% during November and +0.3% market consensus.
While data decline at home restricted the CAD’s ability to register gain versus the USD on Thursday, news from South China Morning Post conveying differences between the US and China over IPR and structural reform issues added further weakness into the Canadian Dollar as China is the second largest consumer of Canada.
Looking forward, inflation data from China can offer immediate direction to the USD/CAD pair. The National Bureau of Statistics of China is scheduled to release the Consumer Price Index (CPI) and Producer Price Index (PPI) figures for January month at 01:30 GMT. The CPI is expected to remain unchanged at 1.9% on a yearly basis whereas may drop to 0.2% from 0.9% prior on the same set-up. Also, the month on month changes in CPI suggests an increase to 0.5% from 0.0% prior.
Other than China’s data, progress on the US-China trade negotiation during the last day of the US delegates’ visit could also offer noticeable market moves.
USD/CAD Technical Analysis
USD/CAD needs to surpass 1.3310 resistance in order to target 1.3330 and 1.3370. If the pair manage to rise over the late-January high of 1.3370, 1.3400 & 1.3445 can become buyers’ favorites.
Alternatively, 1.3225 and 1.3190 can limit immediate downside, a break of which can fetch the quote to 1.3155. During the pair’s additional declines past-1.3155, 1.3115 and 1.3065 should be watched carefully.
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