USD/CAD – Little Movement as US Posts Strong Manufacturing Data

USD/CAD is steady on Monday, as the pair continues to trade in the mid-1.08 range in the North American session. In the US, there was good news as the Empire State Manufacturing Index posted another strong reading. Capacity Utilization Rate and Industrial Production met expectations. In Canada, Foreign Securities Purchases was a pleasant surprise, posting its best showing in a year.

The Canadian dollar remains firm as we start the new trading week. The currency shrugged off a dismal Manufacturing Sales reading on Friday, as the key indicator came in at -0.1%, well short of the estimate of +0.9%. On Monday, Foreign Securities Purchases posted a gain of $10.13 billion, its highest level since last May. The estimate stood at $4.27 billion.

The US ended a rough week on a sour note, as inflation and consumer confidence numbers missed their estimates. PPI, a key gauge of inflation in the manufacturing sector, came in at -0.2%, its worst reading since October. The estimate stood at 0.1%. Preliminary UoM Consumer Sentiment also lost ground, falling to 81.3 points, short of estimate of 83.3. However, with only one reading this year below the 80-point level, US consumer confidence remains at high levels.

Thursday’s key US events were a major disappointment, as retail sales and employment numbers were weak. Retail Sales came in at 0.3%, short of the estimate of 0.5%. Core Retail Sales could only muster a gain of 0.1%, shy of the forecast of 0.4%. Unemployment Claims, one of the most important economic indicators, rose to 317 thousand, missing market expectations of 306 thousand.

 

USD/CAD for Monday, June 16, 2014

USD/CAD June 16 at 15:15 GMT

USD/CAD 1.0852 H: 1.0882 L: 1.0836

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0706 1.0775 1.0852 1.0906 1.1000 1.1094

 

  • 1.0906 continues to provide resistance. The round number of 1.1000 is stronger.
  • The pair is testing support at 1.0852. The next support line is at 1.0775.
  • Current range: 1.0852 to 1.0906

Further levels in both directions:

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

 

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in long positions on Monday. This is not consistent with the pair’s movement, as the Canadian dollar has posted small losses. The pair has a majority of long positions, indicative of trader bias towards the US dollar posting gains.

The Canadian dollar continues to show little movement. The pair has edged lower in the North American session.

 

USD/CAD Fundamentals

  • 12:30 Canadian Foreign Securities Purchases. Estimate 4.27B. Actual 10.31B.
  • 12:30 US Empire State Manufacturing Index. Estimate 15.2 points. Actual 19.3 points.
  • 13:00 US TIC Long-Term Purchases. Estimate 41.3 B. Actual -24.2B.
  • 13:15 US Capacity Utilization Rate. Estimate 78.9%. Actual 79.1%.
  • 13:15 US Industrial Production. Estimate 0.6%. Actual 0.6%.
  • 14:00 US NAHB Housing Market Index. Estimate 47 points. Actual 49 points.

*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.