USD/CAD poised to resume higher after bouncing off trend support

Following today's stronger Canadian retail sales report, with headline sales coming in at +0.9% m/m vs. +0.3% expected, the Canadian dollar initially strengthened slightly. But later on we saw the US flash Services PMI come in well ahead of expectations at 57.0 vs. 55.2 eyed and 55.0 last. Though UoM Consumer Sentiment got revised lower unexpectedly to 71.8 from 73.0, this failed to weigh much on the dollar. The result? The USD/CAD managed to hold the support trend line and key support in the 1.3950-1.3970 zone.

As a result, we could see the USD/CAD drift higher, aligning itself with other dollar pairs (e.g., EURUSD which has broken down sharply today).

By Fawad Razaqzada, market analyst with FOREX.com