The US dollar is ending the week strong but a tad less firm after today’s data.  This morning’s US retail sales and CPI data caused the US dollar to slip on the news, as day traders were positioned for much stronger prints

Retail Sales rose 0.4% in April, below the 0.6% forecast but well above the March 0.1% result. Headline April CPI was as expected at 2.0%, month over month.

USDCAD was at 1.3695 just before the New York open. It climbed to 1.3740 in anticipation of much stronger than expected US data.  Those buyers were disappointed and USDCAD dropped to 1.3700.  AUDUSD and NZDUSD rallied after the data but they managed to hang on to their gains.

EURUSD broke above 1.0880 which had capped gains since Thursday afternoon. GBPUSD jumped to 1.2884 from 1.2845

Overnight, FX traders stayed close to home in a quiet session.  The Trump/Comey show entertained as the warm-up act ahead of the US inflation and retail sales data.

Oil prices are higher, supported by the soft US data but WTI is still below the overnight peak of $48.05 That level is the downtrend line from the April peak.  A decisive break above $48.05 will confirm a short-term bottom is in place and lead to a test of $52.00/b.  A move below $46.50 will extend losses to $44.00 again.

The Opec Monthly Oil Market Report released on May 11 forecasted that outside supply would rise to 950,000 barrels per day from  the prior guess of 580,000 b/d in 2017. That suggests further gains are WTI price gains are limited.

The US dollar has made decent gains since last Friday’s New York close which suggests a degree of profit-taking US dollar weakness ahead of the weekend.

Chart: Currency gains/losses vs US dollar from NY close May 5 to 6;00 am PST May 12

Source: Loonieviews

USDCAD Technical outlook:

The intraday USDCAD technicals are bullish while prices are above support in the 1.3640-50 area.  That level is being guarded by the uptrend line from April 23 that comes into play at 1.3670.  A break below 1.3650 will target 1.3530 while a break above 1.3770 puts 1.3850 in play.

Today’s Range 1.3650-1.3740

Chart: USDCAD 1 hour