USD/CAD Capped by Key Resistance Ahead of Canada Retail Sales Data

If the US Dollar is on its way down and continues to fall, then the Canadian Dollar is going to take the other side of the chart, climbing back on top of the USD/CAD Capped Chart. The Canadian Dollar is the one currency that has been holding its ground and making it difficult for investors to get out of their investments when the USD/CAD Capped Chart shows a downward trend.

One reason why this is happening is because the retail sales data which the analysts and traders are using to decide where to place their trades is being influenced by an unexpected negative change. As the retail sales data from Canada continues to show weakness, this trend continues to continue and will continue until the end of January or possibly later if there is an economic slowdown or collapse in the economy.

If this continues, it will mean that the Retail Sales Index for December is going to drop by more than two percent. This is not good news for the investors, because it means that the Canadian Dollar has continued to rise on the back of the strength in the US Dollar. When this happens, the market will be forced into a tighter sell position.

When the market is in a tighter sell position, the Canadian Dollar should continue to rise. At the same time, the Euro is going to continue to rise against the US Dollar. If this happens, the Canadian Dollar will start a long term downtrend. On the other hand, if the Euro rises against the US Dollar, the Euro is likely to move up to be above the USD/CAD Capped Chart.

If the Euro rises above the USD/CAD Capped Chart, then the Canadian Dollar will soon follow and the US Dollar is going to move down. There will be a reversal of trends in the Canadian Dollar as the EUR/USD Capped Chart comes into its third or fourth quarter.

If the market is able to hold these levels for three consecutive months, then the market is going to continue to break out of the USD/CAD Capped Chart. In addition, the Retail Sales Index for March and April will also show weakness because the US Consumer Credit Survey Data is expected to show a decline in job growth. However, this will be offset by an increase in employment in the service sector.

Once the retail sales data is released, the breakout levels for the market will be determined by where the USD/CAD Capped Chart meets the key resistance levels on the USD/CAD Capped Chart. The higher the market resistance levels, the more support levels that the market needs to clear in order for the market to continue to break out.