The USDCAD currency pair is attempting to continue its rebound and surpass 1.3250 before the release of Canadian Retail Sales data. It is currently trading at 1.32232.

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• USD/CAD is making efforts for extending its recovery above 1.3250 ahead of Canadian Retail Sales.

The pair currently trades last at 1.32232.

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 is struggling in extending its recovery above the immediate resistance of 1.3250 in the London session. A volatile action is anticipated from the Loonie asset as investors are awaiting the release of the Canadian Retail Sales data for April.

S&P500 futures have turned positive after recovering gains generated in the Asian session. A decent recovery has been observed in the risk appetite of market participants. However, the overall market mood is still cautious as investors are awaiting fresh guidance from Federal Reserve (Fed) chair Jerome Powell in his testimony.

The US Dollar Index (DXY) is inside the woods as investors have been sidelined. What’s driving caution in the market is the approach to be adopted by the Fed for its further journey toward achieving price stability. Investors want to know whether the central bank will hike interest rates further by 50 basis points (bps) as confirmed in the monetary policy statement or will adopt a data-centric approach to maintain the growth outlook.

Meanwhile, the Canadian Dollar will be impacted by the Retail Sales (April) data. Monthly Retail Sales data is seen expanding by 0.2% against a contraction of 1.4% witnessed earlier. Economic data excluding automobile numbers is seen expanding by 0.4%. This indicates that demand for automobiles has remained weak as higher inflationary pressures are biting the income of households. Also, individuals are postponing demand for automobiles to avoid higher installment obligations due to elevated interest rates by the Bank of Canada (BoC).

On the oil front, the oil price is showing topsy-turvy moves above $71.00 despite a dovish policy stance by the People’s Bank of China (PBoC). 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 1.323 at the time of writing. Pair opened at 1.3235 and is trading with a change of -0.04 % .

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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