The Canadian dollar has gained 1.1% so far this week, but is having a very calm Friday session. USD/CAD is currently trading at 1.3235, up 0.07% on the day. We could see some movement in the North American session, with releases on both sides of the border. Canada releases manufacturing sales, while the US publishes retail sales, a key gauge of consumer spending.
Bright forecast for Manufacturing Sales
Canada releases the June data for Manufacturing Sales later on Friday. The manufacturing sector was hammered by Covid-19 in the second quarter, and this was reflected in manufacturing sales plummeting by 28.5% in April. However, the indicator bounced back in May, posting a gain of 10.7%. Analysts are projecting an even stronger gain of 16.4% in June. If the actual read is close to this estimate, the Canadian dollar could get a boost.
US Retail Sales expected to slow
All eyes will be on US retail sales, as this indicator is often a market-mover. Consumer spending was strong in June, as the headline figure gained 7.5% while the core reading climbed 7.3%. July is expected to post only modest gains, with a forecast of 2.0% for the headline read and 1.3% for the core release. Still, if the actual readings are within expectations, we can expect the greenback to hold its own. However, if the readings are softer than expected, USD/CAD could lose ground.
USD/CAD Technical
USD/CAD moved slightly higher in the Asian session but then gave up these gains. The pair posted considerable losses in European trade but has steadied in North American trade.
- 1.3321 in the next resistance line. This is followed by resistance at 1.3393
- USD/CAD has tested 1.3204 in support. The next support line is 1.3159
- The 10-day MA line, which is at 1.3227, remains relevant
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