- The dollar needs positive data to retake the lead.
- A new lower low triggers more dips.
- US data should shake up the markets today.
USD/CAD weakened on Friday, hitting today’s low of 1.3466. The pair has recovered and is trading at 1.3475 at the time of writing.
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The price appears indecisive as traders wait for US economic data before taking action again. The currency pair slipped yesterday as retail sales reported a 0.8% decline versus the 0.2% decline expected after a 0.4% rise in the previous reporting period. Core retail sales fell 0.6%, although traders had expected a 0.2% rise.
Moreover, the rate of industrial production and capacity utilization was also worse than expected.
Today, US economic data should once again have a big impact. PPI is expected to report a rise of 0.1%. Core PPI could announce a growth of 0.1%, while Prelim UoM Consumer Sentiment could jump from 79.0 to 80.0 points.
In addition, data on construction permits and housing starts will be published. Positive US data boosts the dollar.
Technical analysis of USD/CAD price: correction phase
Technically, a correction was bound to happen after such impressive growth following US inflation numbers. The price found demand just below the weekly pivot point of 1.3471 and below the midline of the descending villa (ml). Downside pressure remains high despite minor spikes.
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A deeper dollar correction should send the pair to new lows. Removing the middle line and making a new lower low triggers more dips.
On the contrary, holding above the weekly pivot point (1.3471) and making a new higher high confirms an upward movement in the short term.
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