USD/CAD: Listless as Rangebound Trade Continues

The Canadian dollar is showing little activity on Tuesday, as USD/CAD continues to trade in the mid-1.07 range late early in the North American session. On the release front, US CPI posted a weak gain last month. There was excellent news on the housing front, as Existing Home Sales exceeded expectations and hit its highest level in eight months. There are no Canadian releases on Tuesday’s schedule.

US inflation numbers continue to struggle. Core CPI posted a paltry gain of 0.1%, shy of the estimate of 0.2%. The key index has looked anemic in 2014, with its highest gain this year at just 0.3%. CPI gained 0.3% last month, matching the forecast. Meanwhile, Existing Home Sales jumped to 5.04 million, surpassing the estimate of 4.94 million. This was the best showing we’ve seen since October, and follows a disappointing release from Housing Starts, which was published last week.

Recent US data has been mixed, but employment numbers continue to shine. On Thursday, Unemployment Claims dropped slightly to 302 thousand, beating the estimate of 310 thousand. This figure marks a seven-week low, as the economy continues to churn out impressive employment data. With Janet Yellen telling Congress last week that a rate hike could be pushed forward if inflation and employment data exceeds expectations, improving employment data will put more pressure on the Fed to raise rates.

 

USD/CAD for Tuesday, July 22, 2014

USD/CAD July 22 at 14:40 GMT

USD/CAD 1.0742 H: 1.0759 L: 1.0731

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0414 1.0572 1.0678 1.0775 1.0852 1.0961

 

  • USD/CAD has had a quiet day. The pair touched a high of 1.0759 late in the European session, but has since retracted.
  • On the upside, 1.0775 is an immediate resistance line. 1.0852 is stronger.
  • 1.0678 is providing support. 1.0572 is next.
  • Current range: 1.0678 to 1.0775

Further levels in both directions:

  • Below: 1.0678, 1.0572, 1.0414 and 1.0271
  • Above: 1.0775, 1.0852, 1.0961 and 1.1004

 

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in long positions on Tuesday. This is consistent with the pair’s movement, as the US dollar has posted small gains. The ratio has a substantial majority of long positions, indicative of strong trader bias towards the US dollar gaining ground.

 

USD/CAD Fundamentals

  • 12:30 US Core CPI. Estimate 0.2%. Actual 0.1%.
  • 12:30 US CPI. Estimate 0.3%. Actual 0.3%.
  • 13:00 US HPI. Estimate 0.4%. Actual 0.4%.
  • 14:00 US Existing Home Sales. Estimate 4.98M. Actual 5.04M.
  • 14:00 US Richmond Manufacturing Index. Estimate 5 points. Actual 7 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.