USD/CAD – Little Movement as Unemployment Claims Disappoints

The Canadian dollar is trading quietly on Thursday, as USD/CAD is just above the 1.09 line in the North American session. On the release front, US Unemployment Claims climbed to 311 thousand, above expectations. In Canada, the New Housing Price Index posted a weak gain of 0.2%, matching the estimate.

In the US, Unemployment Claims came in higher than expected. The indicator climbed to 311 thousand, marking a six-week high. The estimate stood at 307 thousand. Employment indicators are being closely scrutinized by analysts, as the strength of the labor market is one of the most important factors influencing the Federal Reserve regarding the timing of an interest rate hike. A rate increase is expected by mid-2015, but stronger economic data, especially on the employment front, could hasten a move by the Fed. Earlier in the week, JOLTS Job Openings hit its highest level in 13 years, although it too missed expectations.

In Canada, inflation remain stuck at low levels. The New Housing Price Index came in at 0.2%, little changed from the 0.1% gain in the previous reading. Weak inflation is a sign of an underperforming economy which continues to weigh on the shaky Canadian dollar, which has lost around 200 points to its US counterpart in the past month. On Friday, Canada releases Manufacturing Sales, the key event of the week. Traders should be prepared for some movement from USD/CAD if the indicator does not meet expectations. There was some positive news earlier in the week for the housing sector, as Housing Starts climbed to 200 thousand last month, exceeding the estimate of 194 thousand. It was the indicator’s best performance since last June.

 

USD/CAD for Thursday, August 14, 2014

USD/CAD August 14 at 14:25 GMT

USD/CAD 1.0906 H: 1.0921 L: 1.0887

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0678 1.0775 1.0852 1.0961 1.1004 1.1124

 

  • USD/CAD was flat in the Asian session. The pair lost ground in European trading, dipping below the 1.09 line. USD/CAD has moved back into 1.09 territory in the North American session.
  • 1.0961 is the next resistance line. 1.1004 is next.
  • 1.0852 is providing support. 1.0775 follows.
  • 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 Thursday trade. This is consistent with the pair’s movement, as the Canadian dollar has posted gains.. The ratio has a small majority of short positions, indicative of slight trader bias towards the Canadian dollar continuing to move higher.

 

USD/CAD Fundamentals

  • 12:30 Canadian New Housing Price Index. Estimate 0.2%. Actual 0.2%.
  • 12:30 US Unemployment Claims. Estimate 307K. Actual 311K.
  • 12:30 US Import Prices. Estimate -0.2%. Actual -0.2%.
  • 14:30 US Natural Gas Storage. Estimate 81B. Actual 78B.
  • 17:01 US 30-year Bond Auction.

* 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.

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.