USD/CAD extends gains amid stronger U.S. dollar and soft Canada data

• USD/CAD climbed  on Thursday as a stronger U.S. dollar and disappointing Canadian retail sales data pressured the loonie.

•The U.S. dollar firmed on Thursday as investors responded positively to progress in trade negotiations between the United States and several of its key trading partners.

•Canadian retail sales fell 1.1% in May, as consumers cut back on car buying and reduced spending at grocery stores, convenience outlets, and on alcohol, data showed Thursday.

•The Bank of Canada is set to announce its rate decision next week, with markets widely expecting it to keep borrowing costs unchanged. However, most economists believe the central bank will need to resume rate cuts soon to support a slowing economy.

•Meanwhile, EU diplomats signaled that a trade pact with the U.S. was within reach, despite authorizing counter-tariffs targeting $109 billion in American goods.

• Immediate resistance is located at 1.3661(SMA 20), any close above will push the pair towards 1.3690(38.2%fib).

• Support is seen at 1.3567(23.6%fib) and break below could take the pair towards 1.3548(Lower BB).

Recommendation: Good to buy around 1.3620, with stop loss of 1.3530 and target price of 1.3680