FX Headlines: Canadian Retail Sales Disappoints in December
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•U.S. Home Prices Likely Had Biggest 12-Month Drop In a Year – Bloomberg
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USDCAD: Retail sales in Canada fell 0.2 percent in December after climbing a revised 1.5 percent the month prior amid economists’ expectations of 0.0 percent. At the same time, retail sales less autos rose 0.6 percent in the same period, which was in line was forecasts. Indeed, today’s decline in sales marks the first contraction since May 2010. Five of eleven components pushed lower in December as consumers scale back spending amid record debt levels and uncertainty in the region’s economic outlook. As the weak retail sales does not bode well for economic activity, traders should caution a turnaround in the loonie in the medium term.
Taking a look at price action, the USDCAD pared yesterday’s decline; however upside risks remain capped by 0.9940 which coincides with the descending trend line dating back to November 29th. As our speculative sentiment index stands at 5.92, providing the contrarian signal to remain short, I do not rule out additional losses going forward. Traders will now shift their focus to the U.S. consumer confidence report which will be released at 15:00 GMT. As of late, expectations are for a decline to 65.5 in February from a revised 65.6 in January. Join me to cover the report live!
Written by Michael Wright, Currency Analyst
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Michael Wright is the author of FX Headlines, Fundamentals vs. Technical’s, Weekly Spotlight, and Forex Trading Weekly Forecast
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.