Canadian retail sales are forecasted to have fallen by 0.1% in April which would be the first decline in four months. Wholesale sales fell for a seventh month in April underlining a weakening of demand.
[B]June 19[/B]
[B]Canadian Retail Sales (APR)(MoM)(GMT 12:30: 08:30 EDT)[/B]
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[B]Expected: -0.1%[/B]
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[B]Previous: - 0.1%[/B]
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[B]Fundamental Outlook[/B]
Canadian retail sales are forecasted to have fallen by 0.1% in April which would be the first decline in four months. Wholesale sales fell for a seventh month in April underlining a weakening of demand. Therefore we could see a significant reduction is consumption considering the shrinking inventories. A drop in domestic demand could weigh on the Canadian dollar which would conflict with the technical outlook for further USDCAD weakness. However, gasoline receipts in February fell 2.8% but since then we have seen oil prices rise which could lead to a reversal in the component and drag the headline reading into positive territory. Bullish data would validate the technical call for a possible test of 1.0780.
[B]Technical Outlook [/B]
It is possible that the USDCAD decline from 1.3068 is complete but there remains a competing alternate in which the pair will drop to a new low (below 1.0780) before resuming the larger rally. The 61.8% of the advance from .9055 is at 1.0417 and is potential support. Potential short term support is at 1.1200.
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[I]To discuss this report contact John Rivera, Currency Analyst: [email protected][/I]
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