Canadian Dollar struggling to hold onto gains for Friday

• The Canadian Dollar is seeing a minor recovery against the US Dollar.
• A Retail Sales beat sees little positive momentum for the Loonie as markets remain USD-focused.
• Steady Crude Oil prices aren’t hurting the CAD, but aren’t helping it either.

The Canadian Dollar (CAD) is seeing some minor lift on Friday, but selling pressure remains and intraday action is steadily pushing the USD/CAD back to its opening bids.

Canada Retail Sales beat expectations but still came in soft nonetheless and the 1.3700 price point remains too attractive a level for US Dollar (USD) bidders to abandon.

Daily Digest Market Movers: Canadian Dollar cycling this week’s popular price level as markets follow USD flows

• Canada Retail Sales beat forecasts, but still flubbed the previous printing.
• August’s CAD Retail Sales declined 0.1%, beating the forecast -0.3%.
• Despite the forecast beat, data is still soft, coming in below previous as consumer spending weakens.
• July’s data was revised higher from 0.3% to 0.4%, widening the data gap after the fact.
• Thursday’s outing from Federal Reserve (Fed) Chairman Jerome Powell continues to wriggle through markets as investors remain leery of the Fed’s dot plot.
• Market participants fearing a higher, longer interest rate cycle from the Fed are currently setting themselves up for disappointment.
• Fed officials continue to speak up their willingness to keep rates high.
• The October US Preliminary Purchasing Manager Index (PMI) next Tuesday will be the next data to hit the USD/CAD pair.

Technical Analysis: USD/CAD refusing to move too far from 1.3700 as Canadian Dollar takes two steps forward and one step back

The USD/CAD opened up Friday’s trading near 1.3716, dipping to a daily low of 1.3670 as the Loonie gains inches rather than miles on the Greenback, but the pair continues to see play close to the 1.3700 handle.

Daily candlesticks see the USD/CAD trading into near-term highs as a constraining market stance weighs on the pair. Long-term resistance comes from a descending trendline from early 2020’s panic highs of 1.4650, while near-term chart action has the 50-day Simple Moving Average (SMA) rising to provide technical support from 1.3575.

A firm break higher leaves the pair open to make a challenge of 1.3800 near March’s swing highs, while the downside will have to tangle with the 200-day SMA before revisiting lows near 1.3400 from September.