USD/CAD – Canadian Dollar Slips as US Job Claims Softens

The Canadian dollar has lost ground on Thursday, reversing the direction seen a day earlier. In the North American session, USD/CAD is trading slightly above the 1.10 line. On the release front, the Canadian New Housing Price Index dipped to 0.0%. In the US, there was more disappointing news on the labor scene, as Unemployment Claims rose to 315 thousand, well above the estimate.

US employment numbers continue to raise concern. Unemployment Claims rose to 315 thousand, the largest number of claims in 10 weeks. The reading was much higher than the estimate of 306 thousand. This follows soft numbers from JOLTS Job Openings and a dismal Nonfarm Payrolls last week. The troubling job numbers are unlikely to affect the Fed’s plan to continue trimming QE next week, but a weak labor market could postpone plans to raise interest rates by mid-2015.

Canada continues to suffer from weak inflation levels, which point to an underperforming economy. This was underscored by a weak reading from the New Housing Price Index, which dipped to 0.0%, the first time the indicator has failed to post a gain in 2014. The index also points to weak demand in the housing sector, which is a critical component of economic growth.

USD/CAD for Thursday, September 11, 2014

USD/CAD September 11 at 15:15 GMT

USD/CAD 1.1015 H: 1.1026 L: 1.0939

USD/CAD Technical

• USD/CAD has been moving upwards for most of the day, with strong gains during the European session.
• 1.1124 is a strong resistance line.
• 1.1004 is back in a support role and is a weak line. Will this line fall during the day? 1.0961 is next.
• Current range: 1.1004 to 1.1124

Further levels in both directions:

• Below: 1.1004, 1.0961, 1.0852, 1.0775 and 1.0678
• 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 Thursday. This is not consistent with the movement of the pair, as the US dollar has posted strong gains. The ratio has a majority of long positions, indicating trader bias towards the US dollar continuing to move higher.

USD/CAD Fundamentals

• 12:30 Canadian New Housing Price Index. Estimate 0.2%. Actual 0.0%.
• 12:30 US Unemployment Claims. Estimate 306K. Actual 316K.
• 14:30 US Natural Gas Storage. Estimate 84B. Actual 92B.
• 17:01 US 30-year Bond Auction.
• 18:00 US Federal Budget Balance. Estimate -132B.

* Key releases are in highlighted bold.

*All release times are GMT

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