The Canadian Core Retail Sales indicator measures retail sales, excluding automobile sales, which tend to be very volatile and distort underlying trends. A reading which is higher than the market forecast is bullish for the Canadian dollar.
Here are all the details, and 5 possible outcomes for USD/CAD.
Published on Tuesday at 13:30 GMT.
Indicator Background
The Core Retail Sales indicator provides an important snapshot of consumer spending and confidence in the economy. Consumer spending is critical to economic growth, so analysts keep a close eye on this important indicator.
The indicator has been on an impressive upward trend since August, climbing from -0.1%, up to an increase of 0.7% in December. However, the markets are calling for a much smaller increase this month of only 0.2%. Will the indicator continue its upward swing and surprise the markets?
Sentiments and levels
Strong US figures together with high oil prices are bullish for the Canadian dollar. However, recent weak domestic figures in Canada, such as wholesale sales, along with the possibility of a housing bubble, are weighing on the loonie. Thus, the overall sentiment is neutral on USD/CAD towards this release.
Technical levels, from top to bottom: 1.0263, 1.02, 1.0143, 1.0070, 1.00, 0.99 and 0.9830.
5 Scenarios
- Within expectations: -0.1% to 0.5%: In this scenario, USD/CAD could show some slight fluctuation, but it is likely to remain within range, without breaking any levels.
- Above expectations: 0.6% to 0.9%: A reading above expectations would be an indication of growth in the Canadian economy, and could push the pair below one support level.
- Well above expectations: Above 0.9%: An unexpectedly sharp rise in retail sales could propel USD/CAD downwards, and two levels of support can be broken.
- Below expectations: -0.5% to -0.2%: A reading into negative territory could push USD/CAD upwards, with one resistance level at risk.
- Well below expectations: Below -0.5%: A very poor reading would hurt the loonie, and the pair could break two resistance levels or more.
For more on USD/CAD, see the USD/CAD.