The USDCAD pair, currently at 1.32126, has experienced a significant decline to nearly 1.3210. This comes as a result of Canadian Retail Sales surpassing expectations, growing by 1.1% instead of the anticipated 0.2%.

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• USD/CAD has dropped sharply to near 1.3210 as Canadian Retail Sales have expanded to 1.1% vs. 0.2% as expected.

The pair currently trades last at 1.32126.

The previous day high was 1.327 while the previous day low was 1.3206. The daily 38.2% Fib levels comes at 1.3245, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.323, expected to provide resistance.

The USD/CAD pair has witnessed selling pressure as Statistics Canada has reported surprisingly higher Retail Sales data (April). The economic data has expanded by 1.1% while the street was anticipating an expansion of 0.2%. Last month, Canadian Retail Sales contracted by 1.5%.

Upbeat Retail Sales data might force the Bank of Canada (BoC) to raise interest rates further as higher households’ demand would eventually propel price pressures.

Analysts at CIBC affirm that some cracks appeared within the Canadian labor market in May, but these “may not yet be wide enough to convince the Bank of Canada that inflation is about to meaningfully cool off.”

Meanwhile, S&P500 futures have extended their losses as the market mood is turning precautionary ahead of Federal Reserve (Fed) chair Jerome Powell’s testimony. The US Dollar Index (DXY) is demonstrating signs of sheer contraction in volatility as investors are expected to build fresh positions after assessing commentary from Jerome Powell.

Investors are keenly focusing on whether Jerome Powell will stick to its prior guidance of pushing interest rates further by 50 basis points (bps) this year or to remain data-dependent.

On the oil front, oil prices are expected to show some action after the release of the oil inventory data by the United States American Petroleum Institute (API) for the week ending June 16.

It is worth noting that Canada is the leading exporter of oil to the United States and higher oil prices will support the Canadian Dollar.

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.3223 at the time of writing. Pair opened at 1.3235 and is trading with a change of -0.09 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.3414, 50 SMA 1.3459, 100 SMA @ 1.351 and 200 SMA @ 1.352.

The previous day high was 1.327 while the previous day low was 1.3206. The daily 38.2% Fib levels comes at 1.3245, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.323, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.3204, 1.3173, 1.314
• Pivot resistance is noted at 1.3268, 1.3301, 1.3332

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