Canada retail sales came in a bit softer on the surface, but the underlying details were more constructive. Headline sales rose +0.7% vs +0.9% expected, but the prior month was revised higher to +1.2% from +1.1%. Ex-autos, sales increased +0.5% vs +0.8% expected, with the prior also revised up to +1.0% from +0.8%. So while the current read missed expectations, the upward revisions help offset some of that disappointment.
Looking ahead, the March advance reading of +0.6% looks solid at first glance. However, a chunk of that strength is likely tied to gasoline prices, so the cleaner signal will come with next month’s ex-gas breakdown.
Bottom line: The headline miss is tempered by stronger revisions and a firm advance read, suggesting the Canadian consumer was holding up reasonably well heading into the Iran conflict.
USDCAD reaction and technicals
The data helped push USDCAD lower initially, with additional pressure coming from headlines that Iran will send a delegation to Pakistan — a modest positive for risk and a negative for the USD. However, as the session has evolved, we’ve seen a rotation back to the upside as geopolitical uncertainty continues to drive flows heading into the weekend.
Technically, it’s been a two-way trade. The early move higher extended toward a resistance target near 1.3715, with the high reaching 1.3714, just shy of that level. That push also took the price above the 200-hour moving average at 1.3694 — a bullish step.
But buyers couldn’t sustain the momentum. The price rotated back lower, breaking back below the 200-hour MA and falling to 1.3679. On the downside, the 100-hour moving average at 1.3667 becomes the next key barometer
