USDCAD Rallies After Canada’s Wholesale Sales Data

The US Dollar (USD) inched higher against the Canadian Dollar (USD) on Monday, increasing the price of USD/CAD to more than 1.3350 ahead of the Canada wholesale sales news. The technical bias remains bullish because of a higher high in the recent upside move.

Technical Analysis

As of this writing, the pair is being traded around 1.3358. A hurdle can be seen near 1.3520, the trendline resistance area as marked with brown color in the given below daily chart. A break and daily closing above the 1.3527 resistance shall trigger fresh buying pressure, opening door for a move towards the 1.3600 resistance, the high of 28th December, 2016 as marked with red color in our chart.

On the downside, a support may be seen near 1.3282, the 50% fib level support area as demonstrated in the given above daily chart. A break and daily closing below the 1.3282 support shall incite renewed selling interest, validating a move towards the 1.3067 support zone which is another critical support zone. The technical bias shall remain bullish as long as the 1.3282 support zone is intact.

Canada Wholesale Sales Data

Canadian wholesale trade in January unexpectedly soared by 3.3 percent, its biggest monthly advance in more than seven years, on stronger sales of motor vehicles and parts, Statistics Canada data indicated on Monday. The increase, far bigger than the 0.5 percent gain forecast by analysts, was the greatest since a 3.8 percent advance seen in November 2009 and pushed sales to a record C$59.09 billion ($44.43 billion). In volume terms, wholesale trade grew by 3.4 percent, which is likely to bolster overall economic growth in January.

Trade Idea

Considering the overall technical and fundamental outlook, buying the pair around current levels appears to be a good strategy in short to medium term.

 

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