Unlike its comdoll peers, the Loonie was relatively unbothered by the risk-off theme last week.
Can Loonie bulls push for upswings this week?
Take a look at the potential catalysts that might affect CAD’s intraweek trends:
Inflation reports (Oct 21, 12:30 pm GMT)
- Consumer prices dipped by 0.1% in August though annual inflation remained at 0.1% for the month
- CAD briefly dipped at the news but soon hit new intraday highs as traders took risks ahead of the Fed’s policy announcement
- Market players expect monthly inflation to rise by 0.1%, while the annual rate could speed up to 0.3%
Retail sales (Oct 21, 12:30 pm GMT)
- Retail activity rose by 0.6% in July, much slower than the 22.7% gain seen in June and the expected 0.8% uptick
- Lower building material, garden equipment, and food and beverage sales have also dragged on core retail sales
- CAD made new intraday lows at the news and kept falling on an overall risk-averse trading mood
- Analysts see the headline retail sales at 1.1% in August, while the core figure could inch 0.3% higher after a 0.4% decline
- Annual retail sales could jump by 4.0% (from 2.7%)
Crude oil updates
- As an oil exporter, Canada’s economy is affected by global crude oil prices
- Officials from OPEC+’s producers have recently considered the possibility of a crude oil surplus in 2021
- OPEC has already downgraded its 2021 demand forecasts last week, saying that it will rebound more slowly than previously thought
- OPEC’s Joint Ministerial Monitoring Committee will meet virtually today to discuss compliance with the output cut deal
- While there will be no policy decisions until December 1, this week’s discussions could shape the market’s expectations of policy responses from OPEC and its friends
Technical snapshot
- The Loonie strengthened against the Aussie and the European currencies last week
- CAD lost ground against the dollar and yen in the same time period
- EMAs show the Loonie getting short-term bearish pressure on the daily time frame
- CAD remains under the 200 EMA against AUD, EUR, CHF, and NZD
- The Loonie remains bullish against the pound
- CAD saw the most volatility against GBP, AUD, JPY, and CHF in the last seven days
