Global macro overview for 23/02/2017:
The Canadian December Retail Sales data surprised market participants after the data published were way worse than expected. Market participants expected a slight decrease in retail sales of 0.1% after the revised 0.3% gain, but the number release was at the level of -0.5%. Sales increased for the previous four months and the annual increase was still 4.3%. In volume terms, sales fell 1.0% on the month with a 3.0% annual gain.The biggest decline in sales was reported in motor vehicle dealers (declined 0.9%), health and personal care stores (declined 4.1%), clothing and accessory (declined 3.7%) and in food and beverage stores (0.4%). In conclusion, the most important feature of this data is a drop in sales of products traditionally related to the seasonal holiday spending, especially clothing. It might be only temporary or it might be a symptom of underlying weakness in consumer spending and change in consumer sentiment.
Let's now take a look at the USD/CAD technical picture in the H4 time frame chart. Immediately after the data release, the price tried to break out above the technical resistance at the level of 1.3211, but is was rejected. The price is still trading inside of the golden channel, just around the 200 periods moving average. The next support is seen at the level of 1.3108 and the next resistance is seen at the level of 1.3165.
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