Canadian Wholesale Sales is an important gauge of consumer spending, which is a critical component of economic growth. A reading which is higher than expected is bullish for the Canadian dollar.
Here are all the details, and 5 possible outcomes for USD/CAD.
Published on Wednesday at 12:30 GMT.
Wholesales Sales is a key event, and as such can have a significant impact on the movement of USD/CAD. Retailers order larger volumes from wholesalers when consumer demand is higher, so the indicator helps measure consumer spending.
Canadian Wholesales Sales tends to show some fluctuation, resulting in forecasts that are often off the mark. In June, the indicator jumped 2.2%, its best showing in a year. This crushed the estimate of 0.7%. The markets are expecting a small gain of 0.4% in the upcoming release.
Sentiments and levels
The Canadian dollar had a good week, but upcoming inflation and retail sales data is expected to be soft. Unless these numbers show unexpected strength, the US dollar has a good chance of recovering from last week’s losses. Thus, the overall sentiment is bearish on USD/CAD towards this release.
Technical levels, from top to bottom: 1.1123, 1.1054, 1.0944, 1.0815, 1.0737, and 1.0621.
- Within expectations: 0.2% to 0.6%. In such a scenario, USD/CAD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 0.7% to 1.0%: An unexpected higher reading could send the pair below one support line.
- Well above expectations: Above 1.0%: An unexpected surge in the reading could push USD/CAD downwards, and a second support level might be broken as a result.
- Below expectations: -0.2% to 0.1%: A contraction in economic growth reading could cause the pair to climb and break one level of resistance.
- Well below expectations: Below -0.2%. A very weak reading would likely hurt the loonie and USD/CAD could break above a second resistance level.
For more on the loonie, see the USD/CAD forecast.
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