USD/CAD Price Analysis: Inverse H&S in the offing ahead of Canada Retail Sales, 1.3200 eyed
- USD/CAD remains indecisive, struggles to extend previous day’s rebound from weekly low.
- Bullish chart formation needs validation from Canada Retail Sales for June.
- Convergence of 200-HMA, fortnight-long descending trend line guards immediate upside.
- Loonie pair sellers should wait for 1.3100 breakdown while targeting 1.3000 psychological magnet.
USD/CAD aptly portrays the pre-data anxiety around 1.3170 heading into Friday’s European session. In doing so, the Loonie pair showcases the trader’s cautious mood ahead of the Canadian Retail Sales data for June amid a lackluster market comprising no major data/events.
Also read: USD/CAD stuck in a narrow range above mid-1.3100s, rising Oil prices act as a headwind
Apart from Canada Retail Sales for June, expected 0.5% MoM versus 1.1% prior, the inverse head-and-shoulders (H&S) bullish chart formation, with a neckline surrounding 1.3200, also highlights the USD/CAD pair for trading.
That said, the upward-sloping RSI (14) line suggests the quote’s gradual recovery despite declining for the second consecutive week so far.
It should be noted that a fortnight-old descending trend line joins the 200-Hour Moving Average (HMA) to suggest the 1.3185 level as the short-term key hurdle.
Hence, the USD/CAD pair is likely to edge higher but the upside momentum needs acceptance from the 1.3200 and the Canadian Retail Sales data. Following that, the weekly peak of 1.3245 and the July 10 high surrounding 1.3300 should lure the bulls.
On the contrary, the previous day’s low around 1.3120 and the 1.3100 round figure could challenge the USD/CAD bears before giving them control.
In that case, the multi-month low marked the last Friday around 1.3090 may act as an additional downside filter prior to pleasing the sellers with the 1.3000 round figure.
USD/CAD: Hourly chart
Trend: Further recovery expected