USD/CAD Canadian Dollar Firm on Strong Housing Data

The Canadian dollar has posted slight gains in Wednesday’s North American session, as the pair trades in the mid-1.06 range. In economic news, Canadian Housing Starts had another strong outing in June and beat the estimate. In the US, today’s highlight is the minutes of the Federal Reserve’s June meeting.

Canadian Housing Starts had an excellent June, coming in at 198 thousand, which was unchanged from the previous reading. This beat the estimate of 191 thousand, and marked the third straight month that the key indicator has surpassed the estimate. The indicator has surpassed the 190 thousand level in three of the past four releases, pointing to strong growth in the construction sector. We’ll get a look at housing inflation on Thursday, with the release of the New Housing Price Index.

All eyes are on the Federal Reserve on Wednesday, as the FOMC releases the minutes of its June policy meeting. The markets would love some clarity as to when the Fed is looking to raise interest rates. Any hints in this regard could send the currency markets scrambling. Based on updated Fed forecasts for inflation and unemployment, it’s safe to say that the Fed is cautiously optimistic about the pace of the US recovery.

US employment numbers continue to look sharp. On Tuesday, JOLTS Job Openings jumped to 4.64 million, easily beating the estimate of 4.53 million. This follows excellent figures from Nonfarm Payrolls and Unemployment Rate. Nonfarm Payrolls, one of the most important indicators, bounced back in June with a strong gain of 288 thousand new jobs. This crushed the estimate of 214 thousand. There was more good news from the Unemployment Rate, which continues to move downward. The indicator dipped to 6.1%, its lowest level since September 2008. The strong employment numbers are sure to increase speculation about an interest rate hike by the Federal Reserve, and remarks by Fed policymakers will be under the market microscope.

 

USD/CAD for Wednesday, July 9, 2014

USD/CAD July 9 at 14:00 GMT

USD/CAD 1.0653 H: 1.0684 L: 1.0647

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0271 1.0414 1.0572 1.0678 1.0775 1.0852

 

  • USD/CAD was uneventful in the Asian and European sessions. The pair has edged lower in the North American session.
  • On the upside, 1.0678 is under strong pressure and was briefly breached earlier in the day. 1.0775 is stronger.
  • 1.0572 is providing the pair with strong support.
  • Current range: 1.0572 to 1.0678

Further levels in both directions:

  • Below: 1.0572, 1.0414, 1.0271 and 1.0182
  • Above: 1.0678, 1.0775, 1.0852 and 1.0961

 

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing in gains in short positions in Wednesday trade. This is consistent with the movement of the pair, as the Canadian dollar has posted small gains. The ratio has a majority of long positions, indicative of trader bias towards the US dollar gaining ground.

 

USD/CAD Fundamentals

  • 12:13 Canadian Housing Starts. Estimate 191K. Actual 198K.
  • 14:30 US Crude Oil Inventories. Estimate -1.7M. Actual -2.4M.
  • 17:01 US 10-year Bond Auction.
  • 18:00 US FOMC Meeting Minutes.

*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.