USD/CAD – Steady Ahead of US Unemployment Claims

USD/CAD has edged lower, as the markets await the release of US Unemployment Claims. The pair was trading in the low-1.02 range in the European session.  Today’s highlight is US Unemployment Claims, and the markets will be hoping that this key indicator bears good news. There are no Canadian releases on Thursday.

Over in the US, the streak of weak key releases continues. Since late March, almost all key releases have missed expectations. The bad news continued on Wednesday, as Core Durable Goods declined by 1.4%. This was well below the estimate of a 0.5% gain. The markets are concerned about the pace and extent of the US recovery, and await the release of Unemployment Claims, one of the most important economic indicators, later today.

 The markets are watching carefully as the Bank of Japan meets for a policy meeting on Friday. This will be just the second policy meeting under Governor Haruhiko Kuroda on Friday, who took over the position recently. Kuroda has introduced aggressive monetary easing steps, such as doubling quantitative easing, in an attempt to stamp out deflation, which has hobbled the Japanese economy for years. The BOJ is continuing with its aggressive monetary easing policy, but is not expected to announce new measures. The BOJ will also release its semi-annual outlook report, which will give analysts insight into the central bank’s take on inflation and other economic considerations.

BOC Governor Mark Carney stated in a television interview that he did not expect any increases in interest rates by the central bank before the economy recovers and grows at a 2% clip. Carney will leave his position at the end of May, and take over as Governor of the Bank of England. Canada’s benchmark interest rate has been pegged at 1.00% since September 2010, and with the economy not performing well, we are unlikely to see any increase in interest rates in the near future.

 

USD/CAD for Thursday, April 25, 2013

Forex Rate Graph 21/1/13
USD/CAD April 25 at 12:10 GMT

1.0225 H: 1.0256 L: 10223

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0041 1.01 1.0157 1.0229 1.0282 1.0361

 

USD/CAD has edged lower in Thursday trading. The pair is testing resistance at 1.0229. This is followed by a resistance line at 1.0282. On the downside, there is strong support at 1.0157. This is followed by a support level at the round number of 1.01.

Further levels in both directions:

  • Below: 1.0157, 1.01 and 1.0041
  • Above: 1.0229, 1.0282, 1.0361 and 1.0446

 

OANDA’s Open Position Ratios

USD/CAD ratio continues to show very little movement. This is reflected in the pair, which is not showing much activity. Traders should continue to monitor the ratio for any movement, as this could be a sign that the pair will become more active. Short positions continue to dominate the ratio, indicating that trader sentiment is strongly biased towards the Canadian dollar improving against the greenback.

USD/CAD has edged lower in Wednesday trading. We could see more activity from the pair, as the US releases key employment data later today.

 

USD/CAD Fundamentals

  • 12:30 US Unemployment Claims. Estimate 352K
  • 14:00 US Treasury Secretary Jack Lew Speaks
  • 14:30 US Natural Gas Storage. Estimate 33B

 

*Key releases are highlighted in bold

*All release times are GMT

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.