Loonie slides after weak retail sales


The Canadian dollar, also known as the Loonie, was trading 0.25% weaker on Friday afternoon as weak retail sales numbers undermined it. The USDCAD pair was seen slightly below the 1.32 level at the last check.

Canadian retail sales dropped sharply from 22.7% to 0.6% in July (month-on-month) as consumer demand slowed notably. The ex-autos gauge declined to negative territory again and printed -0.4%, down from 15.5% previously.

It looks like the strong support zone of 1.3120 - 1.3140 was successfully defended, and the pair is trying to catch some bullish momentum. The first resistance should be at 1.32, and if not held, the greenback might strengthen toward the 1.3250/60 selling zone, where previous highs are located. 

If the USDCAD pair rises above 1.3260, the medium-term trend could change to bullish.

Alternatively, a break below 1.3140 support could lead to further losses for the US dollar, and the next target for bears is expected to be at the psychological 1.30 level. 
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