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Fundamental Forex Analysis

When are the Canadian retail sales figures and how could they affect USD/CAD?

Canadian retail sales overview

Statistics Canada will publish the monthly retail sales report for December later this Friday at 13:30 GMT, with consensus estimates pointing to modest growth for the second consecutive month. The headline sales are expected to post a growth of 0.1% as compared to the previous month’s solid rise of 0.9%. Meanwhile, sales excluding automobiles are anticipated to rise by 0.4% as against a modest 0.2% increase recorded in November.

How could it affect USD/CAD?

Ahead of the key release, the pair was seen oscillating in a range just above mid-1.3200s and struggled to capitalize on the previous session’s goodish bounce from three-week lows. A surprisingly stronger reading might be enough to prompt some fresh selling and accelerate the slide back towards the very important 200-day SMA support near the 1.3220-15 region. Some follow-through selling should now pave the way for an extension of the recent corrective slide from four-month tops and has the potential to drag the pair further below the 1.3200 round figure mark towards testing its next major support near the 1.3155-50 horizontal zone.

Conversely, a weaker reading should assist the pair to build on the overnight positive move and make a fresh attempt towards reclaiming the 1.3300 round-figure mark. The momentum could further get extended towards the recent swing highs, around the 1.3330 region, above which the pair seems all set to resume its bearish trajectory witnessed since early January.

Key Notes

About Canadian retail sales

The Retail Sales released by Statistics Canada is a monthly data that shows all goods sold by retailers based on a sampling of retail stores of different types and sizes. The retail sales index is often taken as an indicator of consumer confidence. It shows the performance of the retail sector in the short term. Generally speaking, the positive economic growth anticipates bullish movements for the CAD.

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