USD/CAD – Listless As US Posts Mixed Numbers

Thursday is looking like more of the same for the Canadian dollar, which has stayed close to the 1.10 line throughout the week. USD/CAD is trading close slightly above the 1.10 level in Thursday’s North American session. In economic news, key US releases were a mix. Unemployment Claims came in well above the estimate, while Core Durable Goods Orders jumped to an eighteen-month high.

US releases painted a mixed picture on Thursday. Unemployment Claims jumped to 329 thousand, its highest level since mid-February. This was much higher than the estimate of 309 thousand. There was much better news from the manufacturing front, as Core Durable Goods Orders jumped 2.0% in March, crushing the estimate of 0.6%. This was the key indicator’s best showing since September 2o12. Durable Goods Orders kept up the fast pace with a sharp gain of 2.6%, beating the estimate of 2.1%.

Canadian Core Retail Sales, one of the most important economic indicators, posted a 0.6% gain, down from 1.0% a month earlier. However, this did match the estimate. It was a similar story with Retail Sales, which dropped from 1.3% to 0.5% in March, matching the forecast. On Tuesday, Wholesale Sales jumped 1.1% in March, beating the estimate of 0.7%. It marked the best showing by the indicator since last November.

In the US, New Home Sales was a disaster, as the key indicator plunged to 384 thousand in March, down from 440 thousand in the previous release. The weak reading was nowhere near the estimate of 455 thousand, and marked an eight-month low for the key housing indicator. The housing sector is showing signs of weakness, as both New Home Sales and Existing Home Sales have been on a sustained downward trend.

The markets haven’t reacted to events in Ukraine so far, but that could change if the violence in the east of the country worsens. Russian President Vladimir Putin has threatened to act on his “right” to invade Ukraine, and has also given the country an ultimatum regarding its gas debt. The gas supply from Russia to western Europe is in danger, and if the situation spills out of control, we could see a sharp response from the markets. US Vice-President Joe Biden is in Kiev for a symbolic visit. The West doesn’t have many cards to play against Russia, so every move by Putin will be scrutinized and could impact on the markets.

 

USD/CAD for Thursday, April 24, 2014

Forex Rate Graph 21/1/13

USD/CAD April 24 at 14:20 GMT

USD/CAD 1.1029 H: 1.1039 L: 1.1016

 

USD/CAD Technical

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

 

  • USD/CAD is showing little movement in Thursday trading.
  • The key line of 1.1000 continues to provide weak support. Will the Canadian dollar push into 1.09 territory? There is stronger support at 1.0906, which is protecting the 1.09 level.
  • 1.1094 is the next resistance line. This is followed by 1.1177.
  • Current range: 1.1000 to 1.1094

Further levels in both directions:

  • Below: 1.1000, 1.0906, 1.0852, 1.0775 and 1.0706
  • Above: 1.1094, 1.1177, 1.1319 and 1.1496

 

OANDA’s Open Positions Ratio

USD/CAD ratio is unchanged on Thursday. This is reflected in the lack of movement which continues to mark the pair. The ratio has a slight majority of long positions, indicating a weak trader bias towards the US dollar breaking out and moving to higher ground.

The Canadian dollar continues to show little activity, as it trades in the low-1.10 range. USD/CAD is unchanged in the North American session.

 

USD/CAD Fundamentals

  • 12:30 US Core Durable Goods Orders. Estimate 0.6%. Actual 2.0%
  • 12:30 US Durable Goods Orders. Estimate 2.1%. Actual 2.6%.
  • 12:30 US Unemployment Claims. Estimate 309K. Actual 329K.
  • 14:30 US Natural Gas Storage. Estimate 40B.

*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.