Canada Retail Sales come out better than expected
The headline number rose by 1.2%. The number ex+0. autos also came in better at +0.7 vs expectation of +0.5%. The gain was the 4th in the last 5 months.
Autos (+3,4%) helped the number. 7 of 8 sectors followed showed gains. This may be indicative of a rebound in demand from foreign purchasers.
The USDCAD is slightly lower (higher CAD$) off the number and should remain under pressure. Yesterday, however, the BOC warned that the higher CAD$ has the potential to hurt the recovery.
From a technical perspective the pair remains below the 100 hour MA. The pairs price has been below the MA for 7 straight days after breaking lower at 1.1629, as the market trended lower from the highs on economic recovery and higher oil prices. The decline has erased more than 61.8% of the prior move higher.
Yesterday and today, the price has gotten closer to a test as the market consolidates at the lower level. The current value is at 1.1107. Above that level is the 1.1143 level. A move above this level should lead to additioal corrective move higher. The 1.1143 level will be watched. Above that is the high from last week at the 1.1223 level and the 200 hour moving average at the 200 hour MA at the 1.1281.
Lower oil is working against a higher CAD$ this morning.
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