Ka-Ching! Canadians are shopping like every day is a “Black Friday Sale,” and that is good news for USDCAD bears.  Retail Sales, ex-autos, rose 0.7% in June, far surpassing the 0.0% gain that was forecast.  The headline number rose 0.1%, below the 0.3% forecast due to slower auto sales, but that was expected.

USDCAD had inched higher before the news, and because of broad US dollar strength.  It was sitting at 1.2585 before the data, and it plunged to 1.2528, immediately afterward.

Today’s Canadian data reinforces the view that the Bank of Canada will hike rates again in October, although a September rate hike is not out of the question.

Overnight, the Asia session was on the quiet side.  Traders are waiting for the Jackson Hole Symposium, which starts Thursday.  They hope speeches by Fed Chair Janet Yellen and ECB President Mario Draghi will provide some monetary policy clarity for the US and Eurozone.

 USDJPY traded higher, rising from 108.90 to 109.40 while ignoring fresh threats from the North Koreans who are irked about the US war games going on.  The antipodean currencies traded sideways in a 0.0020-point range.

Markets came to life (relatively speaking) in Europe.  A weaker than expected Eurozone ZEW Economic Survey for August (Actual 29.3 vs. forecast 34.2 and July 35.6) drove led to broad US dollar demand.

 EURUSD headed lower as long positions got reduced.  EURUSD fell from 1.1823 to 1.1753 (current level) erasing yesterday’s move completely.  GBPUSD traders drove the currency down from 1.2907 to 1.2824.  The antipodeans came to life and dropped.  AUDUSD peaked at 0.7949 and dropped to 0.7899 in New York.   NZDUSD topped out at 0.7333 hit 0.7275.

The Jackson Hole symposium and Friday’s US Durable Goods Orders will keep the focus on the US dollar for the next couple of days

USDCAD Technical outlook:

The intraday technicals are bearish while prices are below 1.2590 with this morning’s break of support at 1.2550 opening the door to further losses.  A break of 1.2510 will lead to 1.2465 and then 1.2415.  Only a break above 1.2610 will negate the near term down trend.  For today, USDCAD support is at 1.2510 and 1.2460.  Resistance is at 1.2590 and 1.2630.

Today’s Range 1.2510-1.2590

Chart: USDCAD 4 hour