FxWirePro: USD/CAD outlook weaker on renewed downside pressure

• The USD/CAD pair declined on Friday as Canadian dollar was boosted by stronger-than-expected retail sales data that supported prospects for another interest rate increase by the Bank of Canada.
   
• Retail sales rose by 0.6 percent in May from April to hit a record C$48.91 billion, Statistics Canada said, much greater than the 0.2 percent advance forecast by analysts in a poll. Sales volumes grew by 1.1 percent.
   
• A separate report showed Canada's annual inflation rate slowed to a 20-month low of 1.0 percent in June, well below the Bank of Canada's 2.0 percent target, although core measures showed signs of strength.
   
• The loonie rose even as prices of oil, one of Canada's major exports, fell after a consultancy report forecast a rise in OPEC production for July.
   
• The ongoing weakness is set to continue for this pair as the resistance level at 1.2639 is likely to act as strong barrier to the bulls and bring a further decline towards lower levels.
   
• The immediate support can be seen at 1.2539, break below this level will expose the pair to next support level at 1.2500.
   
• Major resistance can be seen at 1.2639, break above this level will expose the pair towards 1.2652 levels.
  
  Resistance Levels
  
  R1: 1.2585 (50% Retracement level)
  
  R2: 1.2639 (61.8% Retracement level)
  
  R3: 1.2652 (July 19th high)
  
  Support Levels
  
  S1: 1.2539 (38.2% Retracement level)    
  
  S2: 1.2500 (Psychological level)
  
  S3: 1.2485 (23.6% Retracement level)

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