Today’s Canadian retail sales release got me looking at USD/CAD possibly extending its uptrend after seeing a retracement. What do you think?
Currency Snapshot:
Fresh Market Headlines & Economic Data:
- Japan’s markets out no Vernal Equinox Day holiday
- New Zealand’s credit card spending down from .37% to 2.5% in February
- BOE’s Bailey: Speculation that London could be put into lockdown added to this week’s wild swings in markets
- RBA buys $2.9 billion of bonds in first round of QE
- Australia’s banks announce coronavirus relief for small businesses
- China banks unexpectedly keep benchmark loan rate unchanged
- California announces statewide ‘stay at home’ order to stop Coronavirus
- Scott Morrison delays the federal budget until October
Upcoming Potential Catalysts on the Economic Calendar:
- Germany’s PPI at 7:00 am GMT
- Euro Zone’s current account data at 9:00 am GMT
- U.K.’s consumer inflation expectations at 9:30 am GMT
- Canada’s retail sales at 1:30 pm GMT
What to Watch: USD/CAD
Monetary and fiscal policy changes implemented over the last 24 hours eased some of the investors’ concerns. The establishment of swap lines between major central banks, in particular, encouraged risk appetite even until the Asian session.
How long can dollar bears keep up the pressure? USD/CAD is heading towards the 1.4200 major psychological handle that’s near a 50% Fib retracement, 100 SMA, and a rising trend line retest.
If today’s Canadian retail sales data prints stronger than markets are expecting, then we could see USD/CAD revisit the trend line and hit levels closer to the 61.8% Fib retracement.
If Loonie bears go back to their selling, however, then USD/CAD could bounce somewhere between the Fibs and make its way back to its 1.4630 previous highs.
