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• Upbeat US monthly retail sales data provide a minor lift in the last hour.
• Downward revisions of previous month’s figures kept a lid on additional gains.
• Sliding crude oil prices weigh on Loonie and remain supportive of the bid tone.
The USD/CAD pair held on to its daily gains and was now seen trying to to build on the positive momentum further beyond the 1.3100 handle post-US macro data.
The pair built on its steady climb from mid-1.3000s support area and did get a minor lift following the release of US monthly retail sales data, coming in to show a solid m/m growth of 0.5% in July. Adding to this, core retail sales, which exclude automobiles, and control group sales also bettered expectations and posted m/m rise of 0.5% and 0.6% respectively.
Meanwhile, downward revisions to previous month’s sales figures were partly offset by an unexpected rise in the Empire State Manufacturing Index, coming in at 25.6 for July as against an expected dip to 20.0, and remained supportive of the strong bid tone surrounding the US Dollar. The pair, however, struggled to extend the positive momentum and remained capped below 50-day SMA.
Even the ongoing downfall in crude oil prices, which tend to undermine demand for the commodity-linked currency – Loonie, also did little to provide any fresh bullish impetus. Hence, it would be prudent to wait for a strong follow-through buying before positioning for any further near-term up-move.
Technical levels to watch
The 50-day SMA, near the 1.3125 region, might continue to act as an immediate resistance, above which the momentum could get extended towards 1.3170-75 intermediate hurdle en-route the 1.3200 handle.
On the flip side, any meaningful retracement might continue to find support near the 1.3050 region, which if broken might turn the pair vulnerable to slide further towards the key 1.30 psychological mark.