USD/CAD dips below 1.2750 after Canadian retail sales data

The USD/CAD pair remained well offered and dropped below 1.2750 after the release of stronger-than-expected monthly Canadian retail sales data. 

According to the data release just a short while ago, monthly Canadian retail sales recorded a m-o-m growth of 0.9% vs consensus estimates of 0.8%. Core retails sale (excluding automobiles) posted a healthy monthly growth of 1.3% as compared to 0.7% expected. Strong Canadian economic data provided little respite to already weaker US Dollar.

Adding to this, strong bid tone surrounding crude oil prices is also extending support for the commodity-linked currencies, including the Canadian Dollar. The pair now seems to have stabilized around mid-1.2700s.

Next on tap would be the official EIA weekly inventory report that is expected to show a decline in US crude oil inventories and could provide further boost to the black gold and eventually dragging the USD/CAD pair further to the downside.

Technical levels to watch

On a sustained weakness below 1.2750, the pair seems to immediate head towards 1.2700 mark before extending its weakening trend towards June lows support near 1.2645-40 area. On the upside, 1.2800 level now seems to have emerged as immediate resistance, which if conquered should assist the pair towards 1.2850 before the pair makes an attempt to clear 20-day SMA resistance around 1.2870 and head towards reclaiming 1.2900 handle.