Loonie falls after weak retail sales but overall bullish picture remains intact
The USDCAD bounced from new low at 1.3015 (the lowest since 25 Oct) and probed above 1.31 barrier after downbeat Canada’s retail sales (May -0.1% m/m vs 0.3% f/c / Core -0.3% vs 0.3% f/c) deflated loonie.
Fresh advance fully retraced Thursday’s fall of the US dollar, sparked by dovish comments from Fed, that sidelined immediate downside risk after larger bears were repeatedly rejected just above psychological 1.30 support.
Renewed bulls cracked pivotal barrier at 1.3088 (falling 20DMA), but so far without clear break, which is required to confirm basing signal and open way stronger recovery.
Bullish divergence of daily momentum is also seen supportive for further recover, along with signals of first bullish weekly close after four straight weeks in red.
Lift above 20DMA would open lower platform at 1.3145 and unmask pivotal Fibo barrier at 1.3174 (38.2% of 1.3432/1.3015).
Conversely, break and close below 10DMA (1.3068) would soften near-term tone and keep key supports at 1.3015/00 at risk.
Res: 1.3088; 1.3109; 1.3144; 1.3174
Sup: 1.3037; 1.3015; 1.3000; 1.2956