USD/CAD recovers further from 3-month lows on weaker Canadian retail sales
- Intraday bounce gets an additional boost from softer Canadian data.
- The uptick seemed rather unaffected by a goodish pickup in Oil prices.
- A modest USD recovery further collaborated to the recovery move.
The USD/CAD pair built on its modest recovery move from three-month lows and refreshed session tops, around the 1.3120 region in the last hour.
Following an early dip to the lowest level since July 22, the pair managed to stage a modest bounce and the uptick got an additional boost during the early North-American session following the release of softer Canadian macro data.
Softer Canadian data provides an additional boost
According to Statistics Canada, retail sales in Canada contracted by 0.1% in August and fell short of consensus estimates pointing to a growth of 0.4%. Meanwhile, sales excluding autos also missed expectations and dropped -0.2%.
The data helped offset a goodish pickup in Crude Oil prices, now up nearly 1% for the day, and turned out to be one of the key factors that exerted some downward pressure on the commodity-linked currency – Loonie.
This coupled with a modest US Dollar uptick, though lacked any strong bullish conviction amid Fed rate cut expectations, further collaborated to the pair's goodish intraday rebound of around 50 pips.
The pair has now recovered a major part of the previous session's downfall, albeit the recovery move might still be categorized as a technical correction and runs the risk of fizzling out rather quickly at higher levels.
Technical levels to watch