When are the Canadian retail sales figures and how could they affect USD/CAD?

Canadian retail sales overview

Statistics Canada will publish the monthly retail sales report for October later this Friday at 13:30 GMT. Consensus estimates point to stronger growth by 0.5% during the reported month as compared to 0.1% decline recorded in September. Meanwhile, core sales (excluding automobiles) is anticipated to rise by 0.3%, up from the previous month's 0.2% growth

As analysts at TD Securities explained: “Real retail sales should rise in line with the nominal print, owing to largely unchanged consumer prices, which will provide a solid start for Q4 consumption after a muted handoff from the 0.1% decline in retail volumes for September. New house prices for October will be released alongside retail sales with the market looking for a 0.1% m/m increase.”

How could it affect USD/CAD?

Ahead of the key releases, the pair was seen trading with a positive bias for the second consecutive session extending its recovery move from multi-week lows set earlier this week. A surprisingly stronger-than-expected reading might be enough to prompt some fresh selling and drag the pair back towards challenging the 1.3100 handle. Some follow-through selling might turn the pair vulnerable to accelerate the slide further towards testing near five-month-old ascending trend-line support, currently near the 1.3065-60 region.

Alternatively, a weaker reading might prompt some follow-through short-covering move and lift the pair further towards weekly highs resistance near the 1.3185 region en-route the 1.3200 handle. Sustained strength beyond the mentioned hurdles should provide some additional boost and lift the pair back towards the very important 200-day SMA, around the .3230 region, ahead of the 1.3265-70 supply zone.

Key Notes

USD/CAD recovers further from multi-week lows, US/Canadian data in focus

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USD/CAD Analysis: decline likely to continue

About Canadian retail sales

The Retail Sales released by Statistics Canada is a monthly data that shows all goods sold by retailers based on a sampling of retail stores of different types and sizes. The retail sales index is often taken as an indicator of consumer confidence. It shows the performance of the retail sector in the short term. Generally speaking, the positive economic growth anticipates bullish movements for the CAD.