When is Canadian monthly Retail Sales report and how could the data affect USD/CAD?

Canadian Retail Sales Overview

Statistics Canada is scheduled to publish the monthly Retail Sales figures for May later this Friday at 12:30 GMT. The headline sales are estimated to rise by 1.6% during the reported month as against the 0.9% growth recorded in April. Excluding autos, core retail sales probably climbed by 1.6% in May, up from the 1.3% increase in the previous month.

According to analysts at TD Securities: “Gasoline stations will provide a key driver for the headline print which reflects the ongoing surge in fuel prices. Meanwhile, motor vehicle sales should see little change from April, leaving the ex-autos measure up 1.4% (market: 1.8%).”

How Could it Affect USD/CAD?

Ahead of the key release, a fresh leg down in crude oil prices undermined the commodity-linked loonie and kept the USD/CAD pair afloat above the 50-day SMA support. Disappointing domestic data would be enough to exert additional pressure on the Canadian dollar, which, in turn, could prompt some short-covering and provide a goodish lift to spot prices.

Conversely, a stronger reading could offer some support to the CAD, though the immediate reaction is likely to be short-lived amid the prevalent bearish sentiment around crude oil prices. This, in turn, suggest that the path of least resistance for the USD/CAD pair is the upside. That said, repeated failures to capitalize on the attempted recovery move warrant some caution for bulls.

From current levels, any subsequent decline is likely to find decent support near the 1.2830-1.2820 area ahead of the 1.2800-1.2790 region. The latter should act as a key pivotal point, which if broken would be seen as a fresh trigger for bearish traders and make the USD/CAD pair vulnerable. The downward trajectory could then accelerate towards the 1.2700 mark en-route the 1.2675-1.2665 horizontal support.

On the flip side, momentum beyond the 1.2900 mark is likely to confront resistance near the overnight swing high, around the 1.2935 region. Some follow-through buying would suggest that the recent corrective pullback from the YTD peak has run its course and pave the way for additional gains. The USD/CAD pair might then aim to surpass the 1.3000 psychological mark and retest the 1.3075-1.3085 supply zone.

Key Notes

 •  USD/CAD Price Analysis: Bulls trying to defend 50-DMA/50% Fibo. confluence support

 •  Does the USD/CAD have more upside potential?

 •  Canada’s success in chasing inflation is upbeat news for the CAD

About Canadian Retail Sales

The Retail Sales released by the Statistics Canada is a monthly data that shows all goods sold by retailers based on a sampling of retail stores of different types and sizes. The retail sales index is often taken as an indicator of consumer confidence. It shows the performance of the retail sector in the short term. Generally speaking, the positive economic growth anticipates bullish movements for the CAD.