USD/CAD – Canadian Dollar Edges Higher Ahead of Canadian Retail Sales

USD/CAD has edged lower in the Tuesday session. In North American trade, the pair is trading at the 1.33 line. On the release front, Canada releases retail sales reports. After posting declines in December, Core Retail Sales and Retail Sales are expected to post strong gains in January. In the US, FOMC member William Dudley will speak at a Bank of England conference in London. The US will also release Current Account, with the deficit expected to rise to $129 billion.

With the Fed’s quarter-rate point behind us, what’s next for Janet Yellen & Co.? The CME Group has priced a rate hike in May at just 6%, while a June move is priced at 54%. With a dearth of key fundamentals in the US this week, the markets are left to monitoring comments from FOMC members who will be speaking this week, including Fed Chair Janet Yellen. On Monday, Chicago Fed President Charles Evans said he expects the Fed to raise rates two more times this year. This echoes the Fed’s projection in its rate statement. Although three rate hikes in 2017 appears impressive, market players want four hikes, and have reacted with disappointment to the Fed’s more cautious approach. This has sent the US dollar lower, as the Canadian dollar posted gains last week.

Canadian retail numbers were weak in December, with Core Retail Sales declining 0.3%. This was the key indicator’s lowest reading in six months. Was the poor reading merely a seasonal distortion, or is the Canadian consumer tightening the grip on her purse strings? If retail sales in January improve as expected, the Canadian dollar could continue to climb higher.

USD/CAD Fundamentals

Tuesday (March 21)

• 6:00 FOMC Member William Dudley Speech
• 8:30 US Current Account. Estimate -129B
• 8:30 Canadian Core Retail Sales. Estimate 1.3%
• 8:30 Canadian Retail Sales. Estimate 1.5%

*All release times are GMT

*Key events are in bold

USD/CAD for Tuesday, March 21, 2017

USD/CAD March 21 at 8:20 EST

Open: 1.3339 High: 1.3365 Low: 1.3307 Close: 1.3318

USD/CAD Technical

• USD/CAD edged higher in the Asian session but has reversed directions in European trade
• 1.3253 is providing support
• 1.3371 is the next resistance line

Further levels in both directions:

• Below: 1.3253, 1.3120 and 1.3006
• Above: 1.3371, 1.3461, 1.3551 and 1.3672
• Current range: 1.3253 to 1.3371

OANDA’s Open Positions Ratio

USD/CAD ratio is showing small gains in short positions in the Tuesday session. Currently, short positions have a majority (61%), indicative of trader bias towards USD/CAD reversing directions and moving lower.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.