USD/CAD – Loonie’s Lack of Movement Continues

The Canadian dollar is steady in Wednesday trading, as USD/CAD trades just shy of the 1.09 line in the North American session. In the US, there was good news on the inflation front, as the Producer Price Index beat the estimate. There are no Canadian releases on Wednesday.

Low inflation levels have been a persistent problem in the US, and Fed chair Yellen highlighted this issue when speaking before Congress last week. Inflation levels are nowhere near the Fed’s target of 2.0%, and weak inflation is a sign of an underperforming US economy. There was good news on Wednesday as PPI, a key inflation indicator, edged higher in April, coming in at 0.6%. This easily beat the estimate of 0.2%. Core PPI also beat the estimate, posting a gain of 0.5%.

US Retail Sales and Core Retail Sales are key gauges of consumer spending, and are carefully tracked by the markets. Both indicators were weak in April. Core Retail Sales dropped to 0.0%, well off the estimate of 0.6%. Retail Sales followed suit, with a paltry gain of just 0.1%, compared to an estimate of 0.5%. The weak numbers could weigh on the US dollar, which has been struggling of late.

 

USD/CAD for Wednesday, May 14, 2014

Forex Rate Graph 21/1/13

USD/CAD May 14 at 14:35 GMT

USD/CAD 1.0896 H: 1.0926 L: 1.0887

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0706 1.0775 1.0852 1.0906 1.10 1.1094

 

  • USD/CAD is showing little movement on Wednesday, continuing the pattern we’ve seen throughout the week.
  • 1.0852 is providing support. There is stronger support line at 1.0775.
  • On the upside, 1.0906 continues to see action and is a weak resistance line. This is followed by the key line of 1.10.
  • Current range: 1.0852 to 1.0906

Further levels in both directions:

  • Below: 1.0852, 1.0775, 1.0706, 1.0678
  • Above: 1.0906, 1.10, 1.1094, 1.1177 and 1.1319

 

OANDA’s Open Positions Ratio

USD/CAD ratio has posted gains in short positions in Wednesday trading. This is not reflected in the movement of the pair, as the Canadian dollar is showing little activity. The ratio has a majority of long positions, indicative of a trader bias in favor of the US dollar moving to higher ground.

The pair continues to trade close to the 1.09 line. In the North American session, the Canadian dollar is unchanged.

 

USD/CAD Fundamentals

  • 12:30 US PPI. Estimate 0.2%. Actual 0.6%.
  • 12:30 US Core PPI. Estimate 0.2%. Actual 0.5%.
  • 14:30 US Crude Oil Inventories. Estimate -0.4M.

*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.