USD/CAD – Greenback Tops 1.10 as Canadian Housing Data Slips

The Canadian dollar has proved no match against its US cousin, as USD/CAD continues to move higher. The pair pushed above the 1.10 level on Tuesday, marking a 4-month high. The loonie has shed over a cent this week, as the surging US dollar continues to steamroll over its major rivals. On the release front, US JOLTS Job Openings was unchanged last month and fell short of the estimate. Canadian Housing Starts fell to 192 thousand, marking a 5-month low.

US numbers continue to point to a deepening recovery, but the labor market is showing some troubling signs. JOLTS Job Openings was unchanged in August at 4.67 million, short of the estimate of 4.72 million. On Friday, the eagerly-anticipated Nonfarm Employment Change crashed to 142 thousand, its lowest gain since January. This surprised the markets, which had expected a gain of 226 thousand. The disappointing release follows a weak ADP Nonfarm Payrolls report as well as a rise in unemployment claims.

Weakness in the Canadian job sector was underscored on Friday, as Employment Change surprised with a decline of 11.0 thousand in August, the second decline in three readings. The markets had anticipated a gain of 10.3 thousand. As expected, the BOC held interest rates at 1.0% last week. The rates have remained steady for 4 years, the longest lack of movement since the 1950s. The central bank remains in a neutral stance, noting that there is slack in the economy. A rate move is unlikely before 2015, and whether rates move up or down will depend on the strength of the economy and the employment outlook.

USD/CAD for Tuesday, September 9, 2014

USD/CAD September 9 at 15:20 GMT

USD/CAD 1.1011 H: 1.1032 L: 1.0970

USD/CAD Technical

• USD/CAD has been edged higher in the Asian session and broke above the 1.10 level in European trading. The Canadian dollar is unchanged in North American trade.
• On the downside, 1.1004 finds itself in an unfamiliar role of providing the pair with support. 1.0961 is stronger.
• 1.1124 is a strong resistance line. It was last tested in March.
• Current range: 1.1004 to 1.1124

Further levels in both directions:

• Below: 1.1004, 1.0961, 1.0852, and 1.0775
• Above: 1.1124, 1.1278, 1.1414 and 1.1669

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in short positions on Tuesday, a result of strong gains by the US dollar this week. This has led to the covering of long positions, resulting in a greater percentage of short positions. The ratio has a slight majority of long positions, indicating a weak trader bias towards the US dollar continuing to move higher.

USD/CAD Fundamentals

• 11:30 US NFIB Small Business Index. Estimate 95.9 points. Actual 96.1 points.
• 12:13 Canadian Housing Starts. Estimate 197K. Actual 192K.
• 14:00 US JOLTS Job Openings. Estimate 4.72M. Actual 4.67M.
• 14:00 US FOMC Member Daniel Tarullo Speaks.

* Key releases are in highlighted bold.

*All release times are GMT

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