The falling trend line on USD/CAD’s 1-hour time frame is holding for now but the pair is consolidating into what appears to be a symmetrical triangle. Traders are awaiting the results of the Canadian retail sales report, which is set for release during today’s New York session.
Headline retail sales are projected to rebound by 0.6% from the 2.1% slide seen last December. Meanwhile, core retail sales are estimated to recover by 0.4% for January from the 0.9% drop recorded in December.
Stronger than expected figures could result in a Loonie rally, which might push USD/CAD to break below the triangle and head for the recent lows near 1.0200. On the other hand, weaker than expected retail sales figures could trigger a sharp Loonie selloff, which could force USD/CAD to break above consolidation and the trend line.
Bear in mind that USD/CAD is also finding support at an established area of interest near the 1.0250 minor psychological level. A break below this mark could confirm that the downtrend is still intact but another strong bounce could signal a reversal.
By Kate Curtis from Trader’s Way