- USD/CAD is clinging to small daily gains near 1.3810 on Friday.
- On a weekly basis, USD/CAD looks to close virtually unchanged.
- Retail Sales in Canada rose less than expected in July.
The USD/CAD pair edged higher in the early American session bu lost its bullish momentum before reaching 1.3200. As of writing, the pair is up 0.12% n the day at 1.3181 and remains on track to end the week virtually unchanged.
Earlier in the day, the data published by Statistics Canada showed that Retail Sales in July rose by 0.6% to $52.9 billion. This reading fell short of the market expectation for an increase of 1% and put modest selling pressure on the loonie.
Meanwhile, the barrel of West Texas Intermediate (WTI) struggled to build on its weekly gains on Friday and made it difficult for the commodity-related CAD to outperform its rivals. At the moment, the WTI is flat on the day at 40.95.
On the other hand, the US Dollar Index (DXY) failed to break out of its consolidation channel in the absence of significant macroeconomic drivers. The only data from the US showed that the University of Michigan’s Consumer Sentiment Index improved slightly in September.
USD/CAD technical outlook
Credit Suisse analysts argue that following USD/CAD’s rejection from the crucial 1.3254/72 resistance area, the medium-term bias remains bearish.
“We see support initially at 1.3137, beneath which would see a move back to 1.3128 and 1.3119. Beyond here would see a test of the back of the broken March downtrend at 1.3055,” analysts said. “A close below here would further reinforce the view that the medium -term downtrend is taking back over. Support is seen next at 1.3047/38, removal of which would reinforce the bearish bias further for a fall to 1.2994, then medium -term support at 1.2952.”
Additional levels to watch for
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