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USD/CAD trading signal - Canada inflation and retail sales - 22 Jun 2018

Signal details
Entry Price: 
1.3300
Close Price: 
1.3260
Direction: 
Low
Expiry Time: 
21:00 GMT
Result: 
ITM
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Statistics Canada will be releasing the monthly inflation and retail sales numbers today at 13:30 GMT. According to the economists polled, inflation is expected rise 0.4% on a month over month basis. This marks a faster pace of increase compared to the 0.3% growth in inflation registered a month ago.

Higher fuel prices are expected to be driving factor in pushing inflation higher. Other measures of inflation are also expected to show an overall higher trend in consumer prices.

Canada's inflation has been running close to the Bank of Canada's 2% inflation target for a while. The central bank had recently signaled that interest rates will start to rise again.

Besides the inflation report, retail sales are expected to show a solid rebound. Core retail sales excluding auto sales are expected to surge 0.6% on the month. This comes following a 0.2% decline in the previous month.

However, headline retail sales are forecast to remain flat during the month following a 0.6% increase seen the month before. A beat on the estimates could potential begin to cement expectations of another rate hike from the Bank of Canada by the end of the third quarter.

The Canadian dollar is however expected to remain in check with the overall lower risk appetite in the markets. The global trade uncertainty continues to remain as the Trump administration continues to push ahead with imposing tariffs on goods imports from its trading partners including Canada.

Based on the above, today's trading signal is USDCAD, the currency pair was seen trending stronger but price action is signaling signs of a topping formation around 1.3300. Therefore, we expect to see the USDCAD close lower on the day.

usdcad trading signal 22 jun 2018

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.