Upbeat Canada’s Retail Sales in Jan (2.2% m/m vs 1.1% f/c and core retail sales at 1.7% vs 1.1% f/c) sent loonie to fresh three-week high against the greenback at 1.3261 on Tuesday.
The move was also supported by sinking US dollar after Fed officials signaled that US central bank won’t accelerate the monetary tightening pace and will stick to gradual tightening policy, meaning two more rate hikes this year.
USDCAD accelerated reversal from daily high at 1.3362 after data and fully retraced 1.3274/1.3376 recovery rally of past three days, confirming an end of corrective phase and signaling continuation of larger downmove from 1.3533 (09 Mar peak).
Fresh weakness probes below pivots at 1.3281/70 (top of thick daily cloud / daily Kijun-sen line), looking for daily close below, to confirm strong bearish stance for extension towards next target at 1.3208 (Fibo 61.8% of 1.3008/1.3533 rally).
Daily technicals are gradually moving into bearish setup that would be supportive for further weakness.
Broken 100 and 20 SMA’s (at 1.3296 and 1.3335 respectively) offer good resistances, with 20 SMA expected to cap extended upticks.
Res: 1.3296; 1.3335; 1.3352; 1.3376
Sup: 1.3261; 1.3208; 1.3182; 1.3132
