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Forex: USD/CAD upside blocked at 1.0285 ahead of Canada retail sales

FXstreet.com (Barcelona) - The USD/CAD is stronger today as disappointing news coming from China and Germany pressure risk takers. The cross rose to test yesterday’s high of 1.0286 by mid-European session and is now erasing some gains, at 1.0267.

In regard to China manufacturing in which HSBC PMI came in at 50.5 in March, instead of the 51.5 consensus: “This downside miss gives credence to PBoC Governor Zhou weekend remarks about China is now aiming for "lower, sustainable growth". Consensus and the major institutions such as IMF still expect 8+% GDP growth this year, so there’s more work to do to lower expectations. TD at 7¾%”, wrote TD Securities analyst Annette Beacher.

The preliminary release of April German manufacturing PMI was expected to stay unchanged at 49.0 but dropped to 47.9 and services PMI eased from 50.9 to 49.2, instead of the slight rise to 51.0 as expected. French Services PMI rose from 41.3 to 44.1, beating the 42.0 expectations, while the manufacturing figure rose from 44.0 to 44.4, above 44.3 consensus.

TD Securities analyst Annette Beacher also had an input about Canada retail sales: “We expect an above-consensus +0.5% lift in Feb headline retail sales, and core to rise by +0.7%, with risks still skewed to the upside due to strong gasoline sales. The value of auto and core sales should also be strong, but after stripping out price effects volumes are expected to fall, and exert a modest drag on industry level GDP”.

“USD/CAD is consolidating near the hourly resistance at 1.0285 (19/03/2013 high). The recent succession of higher lows favors a break to the upside. Another resistance can be found at 1.0342. Hourly supports can be found at 1.0230 (18/04/2013 low) and 1.0203 (16/04/2013 low)”, wrote MIG Bank analysts Bijoy Kar and Luc Luyet.

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