Grocery store in Toronto. Image source: Maru/Matchbox
Earlier today, Statistics Canada published its latest economic survey. It was revealed that the retail sales have contracted by 26.4 per cent in May, way below the consensus forecasts for a 15.1 per cent decline. The indicator had slipped by 10 per cent a month prior.
Canada Retail Sales. Image source: TradingEconomics.com
The considerable fall elucidates the muted prospects for economic recovery, following the somewhat surprising decision of the Bank of Canada from early June, to scale down its asset-purchasing program.
Such disconcerting results coupled with the subdued inflationary pressures that were also recorded recently could prompt the BOC to reconsider its relatively tighter monetary policy that was advanced in spite of crunching economic circumstances.
Meanwhile, today's performance only contributed to the most recent trends affecting the strength of the Canadian dollar at present. Following our last analysis of USDCAD's price action, the pair remains on its course of appreciating.
The price action finally managed to successfully break out above the minor resistance level at 1.35700, which affirms the rising bullish sentiment in the market. As can be seen from the 4H chart below, the pair is currently attempting to consolidate above it.
The value of the Loonie is likely to remain subdued in the foreseeable future in light of these detrimental economic data, which means that the USDCAD pair is expected to stay on its current trend of appreciation.
The next target-level for the currently developing bullish uptrend is encompassed by the minor resistance level at 1.36600, which could prompt the subsequent establishment of a minor bearish correction.
However, should the price action manage to break out above the latter, the primary target-level would remain to be the minor resistance level at 1.37400, which we outlined in our aforementioned analysis.
USDCAD 4H Price Chart. Image source: Trendsharks ©, created with TradingView.com
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