USD/CAD – Canadian Dollar Slightly Higher as Housing Starts Sparkles

The Canadian dollar has posted modest gains on Monday, as USD/CAD trades in the mid-1.09 range in the North American session. In economic news, Canadian Housing Starts rose to 200 thousand, its highest level in over a year. In the US, it’s a very quiet start to the week. Today’s sole event is a speech from Federal Reserve Governor Stanley Fischer, who spoke at a conference in Stockholm.

Canadian releases started the new week in fine fashion, as Housing Starts hit 200 thousand last month, beating the estimate of 194 thousand. It was the indicator’s best performance since last June, and helped the Canadian dollar improve and put some distance between it and the key 1.10 level. On Friday, employment numbers disappointed, as Employment Change came in almost flat, at just 0.2 thousand. This surprised the markets, which had expected a strong gain of 25.4 thousand. The indicator tends to show sharp swings, which often results in estimates that are well off the mark. There was better news from the unemployment rate, which dipped to 7.0%, down from 7.1%. This matched the forecast.

South of the border, US Unemployment Claims improved, dipping below the 300 thousand level last week. The key indicator dropped to 289 thousand, beating the estimate of 305 thousand. The four-week claims average, which is less volatile than the weekly count, dipped to 293,500, its lowest level since February 2006. The stronger numbers point to increased hiring in response to stronger demand, which in turn has contributed to gains in income and stronger consumer spending. An improving job market is critical for economic growth, and the US dollar has gained broad strength as key US data points upwards.

USD/CAD for Monday, August 11, 2014

USD/CAD August 11 at 15:15 GMT

USD/CAD 1.0939 H: 1.0978 L: 1.0937

USD/CAD Technical

• USD/CAD was flat in the Asian session. The pair lost ground in the European trading and continues to move lower in North American trade.
• 1.0961 has reverted to a resistance role as the Canadian dollar has improved. It is a weak line and could see further action during the day. 1.1004 is next.
• 1.0852 is providing support.1.0775 is next.
• Current range: 1.0852 to 1.0961

Further levels in both directions:

• Below: 1.0852, 1.0775, 1.0678 and 1.0588
• Above: 1.0961, 1.1004, 1.1124 and 1.1278

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in short positions in Monday trade. This is not consistent with the pair’s movement, as the Canadian dollar has posted gains. The ratio has a majority of short positions, indicative of trader bias towards the Canadian dollar continuing to post gains.

USD/CAD Fundamentals

• 7:15 US Federal Reserve Governor Stanley Fischer Speaks.
• 12:30 Canadian Housing Starts. Estimate 194K. Actual 200K.

* Key releases are in highlighted 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.