USDCAD strengthens ahead of US retail sales data

http://www.dreamstime.com/royalty-free-stock-photography-canadian-dollar-image6649727The Canadian dollar retreated against its U.S. counterpart ahead of the release of important U.S. data that may signal retail sales climbed 1.1 percent last month.

Eyes will focus on U.S. retail sales, especially after the flat reading recorded in April, to gather clues about the strength of the economy in the second quarter.

The U.S. will also release its weekly jobless claims data, amid expectations of seeing a rise to 277,000 in initial unemployment claims last week from 276,000 a week earlier.

The USDCAD slipped for four straight sessions on reports citing concerns of the U.S. administration regarding the strength of the dollar and its impact on the economy.

The Canadian dollar also benefited from the significant rise in oil prices, where crude oil edged up to a peak of $61.81 a barrel on Wednesday, compared to Tuesday’s opening at $58.26.

A report released this week showed that the value of permits issued for the month of April in Canada climbed 11.6 percent in April.

BOC Governor Stephen Poloz will speak later in the day, where traders will watch carefully his comments to get clues regarding the future of monetary policy.

The breach of the support line, which now has turned into resistance, has triggered a drop in the pair, but now with the rebound in the dollar the pair may face resistance near this line.

The USDCAD halted its advance as it resistance near the session’s high at 1.2332, where the daily SMA 20 acted as a resistance.

The RSI 14 momentum indicator shows that the price is still below the 50-center line, which prevents it to resume its advance.

USDCAD rises ahead of US data fxcomment

Ahmed Mamdouh

Ahmed Mamdouh, Co-Founder and Head of English Fundamental Analysis at FXComment.com, with 7 years of experience in the financial markets. Mamdouh holds a Master’s Degree in Economics from The American University in Cairo and a Bachelor Degree in Economics from The Faculty of Economics and Political Science, Cairo University.

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