USDCAD Overnight Range 1.2425-1.2535
The Loonie was beaten by the proverbial “ugly stick” following the worst Retail Sales report in nearly 5 years. Statistics Canada announced that Retail Sales dropped 2.0% in December. A poor number was expected which is probably why the US dollar rally stalled at 1.2530. However, the data also provides the Bank of Canada with additional ammunition for another rate cut which should keep US dollar bears in check.
The EURUSD went for a ride lower, taking out stops below 1.1350, without any real catalyst, suggesting that perhaps US dollar long positions were being reloaded in case of a nasty surprise from the Greece debt re-negotiations.
The lack of US data today and Monday suggest that the US dollar will be confined to its current ranges with ebbs and flows dictated by Euro-centric headlines and oil price movements
USDCAD technical Outlook
The short term technicals are bullish and looking for a decisive break of 1.2550 to extend gains to 1.2650. A failure to break 1.2550 decisively warns of a retracement back to the morning’s low of 1.2460. Longer term, the USDCAD uptrend remains intact above 1.2420 looking for a break of 1.2750-1.2800 to extend gains to 1.3050.
Today’s Range 1.2480-1.2465