USD/CAD – Loonie Rally Continues As US Unemployment Claims Shine

USD/CAD continues to drop, as the pair trades in the mid-1.10 range on Thursday. In Thursday news, US Unemployment Claims continue to drop, but Pending Home Sales disappointed with its second decline in three readings. There are no Canadian releases for the remainder of the week.

US Unemployment Claims continues to impress. The key indicator dropped to 311 thousand, its lowest level in over three months. The estimate was 326 thousand, marking the fourth straight week that the reading has come in below the forecast. The news was not as good from Pending Home Sales, with a reading of -0.8%. This disappointed the markets, which had expected a small gain of 0.1%. Earlier in the week, New Home Sales also lost ground in February, and concern is bound to increase about the health of the US housing industry.

Ukraine’s economy is in shambles as a result of the four-month political crisis. Prime Minister Arseniy Yatsenyuk acknowledged that the country is on the edge of bankruptcy, and GDP could drop by 3% this year. However, help is on the way. The IMF is set to sign a two-year loan of up to $18 billion, and the EU has offered a package of EUR 11 billion. Ukraine has already received two bailouts from the IMF since 2008, and will have to implement budget cuts and other measures in order to receive the new package from the IMF.

 

USD/CAD for Thursday, March 27, 2014

Forex Rate Graph 21/1/13

USD/CAD March 27 at 15:10 GMT

USD/CAD 1.1065 H: 1.1104 L: 1.1052

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0852 1.0906 1.1000 1.1094 1.1177 1.1319

 

  • USD/CAD continues to lose ground in Thursday trade.
  • On the downside, there is support at the key level of 1.1000. There is stronger support at 1.0906, which is protecting the 1.09 level.
  • 1.1094 has switched to a resistance role as the loonie  moves higher. It is followed by resistance at 1.1177.
  • Current range: 1.1000 to 1.1094

Further levels in both directions:

  • Below: 1.1000, 1.0906, 1.0852 and 1.0775
  • Above: 1.1094, 1.1177, 1.1319, 1.1496 and 1.1639

 

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in long positions in Thursday trade, continuing the trend we have seen for much of the week. This is not consistent with what we are seeing from the pair, as the US dollar has posted more losses. The ratio has a slight majority of long open positions, indicating a slight trader bias to  USD/CAD reversing its downward direction.

USD/CAD continues to lose ground. Will the pair push below the key 1.10 line? The pair is showing little movement in the North American session.

 

USD/CAD Fundamentals

  • 12:30 US Unemployment Claims. Estimate 326K. Actual 311K.
  • 12:30 US FOMC Member Sandra Pianalto Speaks.
  • 12:30 US Final GDP. Estimate 2.7%. Actual 2.6%.
  • 12:30 US Final GDP Price Index. Estimate 1.6%. Actual 1.6%.
  • 14:00 US Pending Home Sales. Estimate +0.1%. Actual -0.8%.
  • 14:30 US Natural Gas Storage. Estimate -49B. Actual -57B.

*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.