USD/CAD – Modest Losses as US Employment Release Disappoints

The Canadian dollar has improved modestly in Tuesday trading as the pair trades in the low-1.06 range. In economic news, it’s another quiet day, with only three releases on the schedule. US JOLT Job Openings fell short of the estimate in November. There are no Canadian releases on Tuesday.

US JOLT Job Openings was the highlight in an otherwise uneventful day. The indicator has now risen for the third straight month, mirroring the improving employment picture in the US. However, the November release of 3.91 million was short of the estimate of 3.93 million, ending a streak of excellent employment numbers, highlighted by Friday’s Non-Farm Payrolls.

In the US, employment numbers continued to impress last week. After another strong Unemployment Claims release, Non-Farm Payrolls was almost unchanged, coming in at 203 thousand. This was well above the estimate of 180 thousand. The Unemployment Rate dropped from 7.3% to 7.0%, beating the estimate of 7.2%. The strong numbers are sure to increase the pressure on the Fed to taper QE when its meets later in December. The Fed has said that a stronger employment picture is a prerequisite to tapering, and last week’s numbers certainly increase the possibility of the Fed taking action at its December policy meeting.

Canadian employment numbers also looked sharp late last week. Employment Change jumped to a three-month high, posting a sharp gain of 21.6 thousand. This was much higher than the estimate of 12.3 thousand. Meanwhile, the unemployment rate remained constant at 6.9% for the third straight month, matching the forecast. Despite the solid data, the Canadian dollar has no made much headway against the greenback, thanks to excellent US employment numbers.

 

USD/CAD for Tuesday, December 10, 2013

Forex Rate Graph 21/1/13

USD/CAD December 10 at 14:05 GMT

USD/CAD 1.0623 H: 1.0646 L: 1.0611

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0442 1.0502 1.0573 1.0652 1.0783 1.0852

 

  • USD/CAD has edged lower in Tuesday trading, as the Canadian dollar continues to move towards the 1.06 line.
  • On the upside, 1.0652 has reverted to a resistance role. This is followed by a resistance line at 1.0783.
  • 1.0573 is providing support. This line could see more pressure if the Canadian dollar can continue to move to higher ground.
  • Current range: 1.0573 to 1.0652

 

Further levels in both directions:

  • Below: 1.0573, 1.0502, 1.0442 and 1.0337
  • Above 1.0652, 1.0783, 1.0852, 1.0945 and 1.10

 

OANDA’s Open Positions Ratio

USD/CAD ratio is almost unchanged in Tuesday trading, continuing the trend we saw at the start of the week. This is not reflected in the current movement of the pair, as the Canadian dollar has posted modest gains. A majority of the open positions in the USD/CAD ratio are short, indicating a trader bias towards the Canadian dollar moving to higher ground.

The Canadian dollar has posted modest gains on Tuesday. With no further releases on today’s schedule, we can expect any movement from USD/CAD to be limited in scope.

 

USD/CAD Fundamentals

  • 12:30 US NFIB Small Business Index. Estimate 92.7 points.
  • 15:00 US JOLTS Openings. Estimate 3.96M. Actual 3.93M.
  • 15:00 US Wholesale Inventories. Estimate 0.3%. Actual 1.4%.

 

*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.