Yesterday’s trade saw USD/CAD within the range of 1.2568-1.2700. The daily high has also been the highest level since February 2nd, when a high of 1.2772 was recorded. The pair closed at 1.2633, gaining 0.37% on a daily basis.
At 10:35 GMT today USD/CAD was down 0.66% for the day to trade at 1.2549. The pair broke the first key daily support level and touched a daily low at 1.2547 at 9:20 GMT.
Fundamentals
United States
Retail sales
Retail sales in the United States probably decreased 0.5% in January on a monthly basis, according to the median forecast by experts. In December compared to November retail sales recorded another 0.9% drop, or the largest monthly decline since September 2009, when sales plunged 2.3%.
Annualized retail sales climbed 3.2% in December, or at the slowest rate since February 2014, following a 4.7% gain in November.
The report on retail sales reflects the dollar value of merchandise sold within the retail trade by taking a sampling of companies, operating in the sector of selling physical end products to consumers. The retail sales report encompasses both fixed point-of-sale businesses and non-store retailers, such as mail catalogs and vending machines. The Census Bureau, which is a part of the Department of Commerce, surveys about 5 000 companies of all sizes, from huge retailers such as Wal-Mart to independent small family firms.
US core retail sales, or retail sales ex autos, probably fell 0.4% in January compared to a month ago, following a 1.0% drop in December. This indicator removes large ticket prices and historical seasonality of automobile sales.
The retail sales index is considered as a coincident indicator, thus, it reflects the current state of the economy. It is also considered a pre-inflationary indicator, which investors can use in order to reassess the probability of an interest rate hike or cut by the Federal Reserve Bank. In addition, this indicator provides key information regarding consumer spending trends. Consumer expenditures, on the other hand, account for almost two-thirds of the US Gross Domestic Product. Therefore, a larger-than-expected decrease in sales would certainly mount selling pressure on the US dollar. The official report is due out at 13:30 GMT.
Canada
Housing prices
Selling prices of new homes in Canada probably rose 0.1% in December compared to a month ago, following another 0.1% increase in November. If so, this would be the fifth consecutive month of gains. Prices climbed at a rate of 1.7% in November compared to November 2013, which has been the fastest annual increase since August 2013. The New Housing Price Index is a key indicator, reflecting the health of Canadian housing market. In case prices surged more than anticipated, this would be an indication of a strong demand and would, therefore, have a bullish effect on the local dollar. Statistics Canada will release the official data at 13:30 GMT.
Pivot Points
According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.2634. In case USD/CAD manages to breach the first resistance level at 1.2699, it will probably continue up to test 1.2766. In case the second key resistance is broken, the pair will probably attempt to advance to 1.2831.
If USD/CAD manages to breach the first key support at 1.2567, it will probably continue to slide and test 1.2502. With this second key support broken, the movement to the downside will probably continue to 1.2435.
The mid-Pivot levels for Monday are as follows: M1 – 1.2469, M2 – 1.2535, M3 – 1.2601, M4 – 1.2667, M5 – 1.2733, M6 – 1.2799.
In weekly terms, the central pivot point is at 1.2550. The three key resistance levels are as follows: R1 – 1.2750, R2 – 1.2973, R3 – 1.3173. The three key support levels are: S1 – 1.2327, S2 – 1.2127, S3 – 1.1904.
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