Canada’s retail sales improved 0.8% m/m in April after a downwardly revised 0.5% gain in March (was +0.7%), leaving a nearly as projected gain. But the ex-autos sales aggregate surged 1.5% m/m in April following a revised 0.1% dip in March (was -0.2%), which was well more than projections. Higher prices (notably at gasoline stations) played a large role in lifting the value of total and ex-autos retail sales. Total retail sales volumes were up a modest 0.3% m/m in April after the 1.1% jump in March. While the ex-autos sale aggregate came in on the firm side of projections, the gain in total sales alongside the more modest rise in sales volumes was roughly as expected. Hence, the report does not alter the outlook for April GDP, which we project will expand by 0.2%.
The Canadian dollar jumped following the strong Retail Sales report, against Euro, US dollar, Aussie and Yen. Therefore EURCAD dropped to below 1.4700 from 1.4895 this morning. In the 4 hour chart a crossing of the two MA line in the stochastic Oscillator was identified at approximately 89, while MA lines have a steep slope below overbought territory. Meanwhile Parabolic SAR turned the last two consecutive sessions, while the pair broke the 20-period MA and keeps moving south.
In the Daily chart, it seems that the asset is ready to create a Tweezer Top after that Strong Bullish Daily candle yesterday. If today EURCAD closes below yesterday’s close prices then this indicates that weakness is likely to continue in a Daily timeframe as well.
Therefore a Short position was just taken with entry at 1.4791. Target 1 is at 1.4720 based on ATR(14) in the 4-hour chart. Target 2 is at 50.0 Fibonacci level, i.e. 1.4660. Support was set at 1.4900.
Click here to access the HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! The next webinar will start in:
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.