FX Action: USD-CAD clocked a two-month high
FX Action: USD-CAD clocked a two-month high at 1.2717, with the pairing being buoyed by a generally firmer tone in the U.S. dollar and a soft oil prices. Crude prices are down for a second straight day, and are presently 2.7% down from the highs seen on Friday (WTI benchmark). Technically USD-CAD's price action has been in a bullish evolution since early February by Dow theory's higher highs and higher lows yardstick, while momentum indicators suggest that the uptrend is not so far looking stretched (the 14-day RSI reading is presently at 65.3). Support is at 1.2622-24. Some key Canadian data releases are looming, with retail sales up today and inflation data up tomorrow. Analysts expect retail sales to dip 0.3% m/m in December on the heels of the tepid 0.2% gain in November. The ex-autos sales aggregate is projected to decline 0.2%. As for CPI, analysts project a 0.4% m/m rebound in January after the 0.4% drop in December, while the y/y figure is seen slowing to a 1.5% y/y pace from 1.9% y/y on the back of a well documented base effect after a one-off elevation in prices in January of 2017. Average weekly earnings are also due on Friday, where analysts expect a 0.3% m/m rise in December.