When will the Canadian retail sales be released and how could they impact the USDCAD pair?
22 May 2019, GKFX – Wednesday's economic docket highlights the release of Canadian monthly retail sales report for the month of March, scheduled later during the early North-American session at 12:30 GMT.
Consensus estimates point to a second consecutive month of solid gains and the headline reading is expected to show that sales at the retail level recorded a growth of 1.0% as compared to a 0.8% rise in the previous month. Meanwhile, core retail sales - excluding automobiles, are also seen to post strong growth of 0.9% during the reported month, up from 0.6% previous.
As Analysts at RBC Capital Markets point out: “Recall that the retail sector has underperformed recently with sales volumes effectively flat-lining over the second half of last year. Yes, sales rose at their fastest pace in nine months in February, but that was a low hurdle to clear and a good chunk of the increase was price-related. We think March’s numbers will look better in both the headline and details.”
Deviation impact on USDCAD
Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to be in the range of 31-38 pips in case of deviations up to -0.14 to +0.51, although in some cases, if notable enough, can fuel movements of up to 60-73 pips in the subsequent 4-hours.
How Canada retail sales affect USDCAD?
Ahead of the key release, the pair fell to near two-week lows and was now seen struggling below the 1.3400 handle but remained well within a broader trading range held over the past four weeks or so. Surprisingly positive readings will be enough to provide a strong boost to the Canadian Dollar and finally confirm a near-term bearish breakdown, turning the pair vulnerable to accelerate the slide towards challenging 100-day SMA support, currently near the 1.3330 region.
Alternatively, a weaker than expected print might provide a minor boost to the major, albeit any meaningful up-move is likely to confront some fresh supply near the 1.3435 horizontal zone. A follow-through buying might boost the pair further but seems more likely to continue facing stiff resistance near the key 1.3500 psychological mark.
About Canadian retail sales
The Retail Sales released by Statistics Canada is a monthly data that shows all goods sold by retailers based on a sampling of retail stores of different types and sizes. The retail sales index is often taken as an indicator of consumer confidence. It shows the performance of the retail sector in the short term. Generally speaking, the positive economic growth anticipates bullish movements for the CAD.
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