USD/CAD Exchange Rate Prediction – USD/CAD Rises Slightly Despite Better than Expected Canadian Retail Sales
The USD/CAD moved higher but settle off the highs of the session following a better than expected Canadian retail sales report. The dollar gained traction despite a softer than expected Markit PMI report. Services fell the most, but manufacturing was also lower, as the hospitality business came under pressure in July as the spread of the delta variant resurfaced.
The USD/CAD moved higher, consolidating the losses experienced earlier in the week. Support is seen near the 20-day moving average at 1.2494. Target resistance is seen near the July highs at 1.2807. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in negative territory with a falling trajectory which points to a lower exchange rate.
Canadian Retail Sales Fall Less than Expected
Statistics Canada says retail sales fell by 2.1% to $53.8 billion in May, as many businesses remained close during the third wave of COVID-19. May retail sales were expected to show a 3.0% loss after a 5.7% drop in April. Sales decreased in eight of 11 subsectors for May. The largest declines in retail sales occurred in the building material and garden equipment and supplies sector, which saw an 11.3%.