Canada retail sales, up 0.3% in Mar, USD/CAD dips further

Saturday, May 23, 2009

Retail sales have increased for third consecutive month in Canada, 0.3% up in March, although, excluding cars, sales of all other products have edged down 0.2%, according to data released by Statistics Canada

The monthly increase has been substantially lower than the 0.5% increment expected by the market. Year on year, retail sales have increased 4.8%.

The USD/CAD decline from 1.1815 high on May 18 has extended to a fresh 7-month low at 1.1203 shorly after the release of Canadian retail sales.

According to Anna Coulling, technical analyst at Master the Markets, indicators show the poair pointing down to 1.1000: "With all three moving averages bearing down on the chart this price action has continued in early trading this morning with a further steep decline which now brings the 1.1 into view and given the present rate of fall this target could easily be reached in the next couple of days, at which point a return to parity becomes a distinct possibility in the medium term, and the only area of resistance now likely to impede this target lies at 1.08."

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