USD/CAD remains confined in a range, moves little post-Canadian retail sales
- The headline Canadian retail sales recorded a strong growth of 0.9%.
- Core sales fall short of market expectations and did little to influence.
- Weaker oil prices, stronger USD might further help limit the downside.
The USD/CAD pair extended its range-bound price action and remained confined in a narrow trading band around the 1.3125-30 region after mixed Canadian retail sales data.
According to Statistics Canada, the headline sales recorded a stronger-than-expected growth of 0.9% in November as compared to the previous month's awful decline of 1.1% (revised up from -1.2% reported earlier).
The positive reading, to a larger extent, was negated by sales excluding automobiles, which rose by 0.2% as against 0.4% expected (-0.4% previous) and thus, did little to provide any meaningful impetus to the major.
On the other hand, the prevailing bullish sentiment surrounding the US dollar seemed rather unaffected by a turnaround in the US Treasury bond yields and was seen as one of the key factors lending some support.
This coupled with a weaker tone surrounding crude oil prices, which tend to undermine demand for the commodity-linked currency – the loonie – might further contribute towards limiting any sharp corrective slide.
Moving ahead, market participants now look forward to the release of the flash version of the US Manufacturing and Services PMI for some short-term trading impetus on the last day of the week.
Technical levels to watch