The Canadian dollar is still falling sharply against the US dollar, with USD/CAD now entering a zone of resistance between 1.2500 (psychological) and 1.2628 (the 50% fib of 1.6193-0.9056). Factors contributing to this move: 1) Broad USD strength on safe-haven flows, as global stock markets are down, Treasuries are up, and volatility as measured by the CBOE's VIX Index remains high at 60.46. 2) Crude oil is down below $70/bbl as the US Energy Department said that fuel demand was down 8.5 percent during the four weeks ended October 17 from a year earlier. This is USD bullish and CAD bearish due to Canada's reliance on energy exports. 3) Canadian retail sales figures for the month of September were released and proved to be disappointing at -0.3 percent. Weak spending on autos, at gasoline stations, and on clothing contributed the most to the decline as consumers try to cut back on discretionary spending. The data is mildly surprising given the record increase in employment for the same period, which suggests that the Canadian labor market release may end up being revised.
USD/CAD (Daily Chart) Source: Intellicharts