USD/CAD – Canadian Dollar Under Pressure, Tests 1.05

The Canadian dollar remains under pressure, as it trades close to the 1.05 level in Tuesday trading. The loonie continues to struggle against the surging US dollar, as USD/CAD has shot up about 200 points in the past three weeks. For the second straight day, there are no Canadian or US economic releases, so we can expect a quiet day from USD/CAD.

Over in the US, the markets had very low expectations from Non-Farm Payrolls, one of the most important economic indicators. The estimate for the October release stood at just 121 thousand, as there was concern that the reading would be artificially low due to the government shutdown in October. However, the indicator put those concerns to rest, as the indicator soared to 204 thousand, its highest level in eight months. The outstanding NFP figure bolstered the US dollar against the major currencies, and has increased speculation that the Fed might press the tapering trigger in December. Such talk could bolster the US currency, as a reduction in QE is bullish for the dollar. At the same time, speculation about a scaling down in QE introduces some uncertainty and volatility in the currency markets.

Canada wrapped up last week with strong employment data. Employment Change posted a respectable gain of 13.2 thousand, beating the estimate of 12.7 thousand. The Unemployment Rate remained unchanged at 6.9%, edging out the estimate of 7.0%. The solid numbers enabled the loonie to hold its own against the US dollar, which showed broad strength following a superb Non-Farm Payroll release on Friday. If the US continues to post good numbers later this week, the hard-pressed Canadian dollar will find it difficult hard to make any inroads against the strong US dollar.

 

USD/CAD for Tuesday, November 12, 2013

Forex Rate Graph 21/1/13

USD/CAD November 12 at 14:30 GMT

USD/CAD 1.0485 H: 1.0509 L: 1.0465

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0282 1.0337 1.0442 1.0502 1.0573 1.0652

 

  • USD/CAD has edged higher in Tuesday trading. The pair crossed above the 1.05 line during the European session before retracting.
  • On the upside, the pair is testing resistance at 1.0502. This line was breached earlier on Tuesday and could see more action during the day. The next line of resistance is at 1.0573. This line has held firm since early July.
  • The line of 1.0442 is providing support. It could face pressure if the Canadian dollar reverses direction. This is followed by support at 1.0337.
  • Current range: 1.0442 to 1.0502

 

Further levels in both directions:

  • Below: 1.0442, 1.0337, 1.0282, 1.0224 and 1.0158
  • Above 1.0502, 1.0573, 1.0652 and 1.0837

 

OANDA’s Open Positions Ratio

USD/CAD ratio is unchanged in Tuesday trading. This is reflected in the current movement of the pair, which has not shown much movement. A majority of the open positions in the USD/CAD ratio are short, indicating a trader bias towards the Canadian dollar reversing its downward trend and moving higher.

The Canadian dollar remains under pressure, as it trades close to the 1.05 line on Tuesday. With no releases on the calendar from Canada or the US, the pair’s movement during the North American session is likely to be limited in scope.

 

USD/CAD Fundamentals

  • There are no US or Canadian releases on Tuesday.

 

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.