After facing rejection near the upper channel of the daily rising wedge, USD/CAD is looking poised for a downside breakout through the wedge, investors are however caution amid Russia-West standoff and US retails sales report which is due later in the US session.
The pair is being traded around 1.1107 at 03:15 GMT in Asia. Immediate support can be seen around 1.1077 that is the 23.6% fib level ahead of 1.1000 which is the lower trendline support as demonstrated in the given below chart. A break and daily closing below the channel support could accelerate the bearish trend exposing 1.0900.
On the upside, the pair is likely to test the channel resistance which is currently sitting in around 1.1153. A daily closing above 1.1153 is required for further upside rallies, which appears a less likely scenario. Various technical indicators such as Relative Strength Index (RSI), Commodity Channel Index (CCI) and MACD are also advocating for more downside movement in the pair.
US retail sales data is scheduled for release today in the American session. According to the median projection of different analysts, the retails sales in the US rose by 0.2% in February as compared to 0.4% decline in the month before. Generally speaking, a high retail sales reading is considered positive for the economy. So if US sales data comes better than expectations, it will be bullish for USD/CAD and vice versa. US business inventory figure is also due for release today. Analysts have predicted 0.4% decline in inventories as compared to 0.5% in the month before. Generally, a low business inventory reading is considered positive for economic activity as it shows warehouses are empty and production is carrying on in full swing.
It is pertinent that US Dollar (USD) is facing selling pressure amid growing uncertainty on the geopolitical front due to the standoff between the West and Russia.