USD/CAD – Steady on Mixed US Numbers

USD/CAD has posted slight losses on Wednesday, as the pair continues to trade close to the 1.12 line. On the release front, US key data was a mix. ADP Nonfarm Payrolls rose 213 thousand, which was above expectations. However, ISM Manufacturing PMI dropped to 56.6 points. There are no Canadian releases on Wednesday.

In the US, ADP Nonfarm Payrolls surprised with a strong gain, climbing to 213 thousand, compared to 204 thousand in the previous release. This beat the estimate of 207 thousand. The ADP release precedes the official NFP release, which will be published on Friday. The markets are anticipating a sharp gain, with an estimate of 216 thousand. If the indicator does follow suit with a solid reading, the US dollar could post further gains against its major rivals. The news was not as cheery on the manufacturing front, as ISM Manufacturing PMI fell to 56.6 points, down from 59.0 points a month earlier.

Earlier in the week, US Pending Home Sales posted a decline of 1.0%, compared to last month’s gain of 3.3%. The important housing indicator has shown strong movement, resulting in readings that have been well off market estimates. US housing indicators continue to paint a mixed picture, as New Home Sales jumped last month, while Existing Home Sales softened and was well short of expectations.

The Canadian dollar has been no match for the juggernaut US dollar, losing about 200 points last week. The loonie has stabilized since then, but remains under pressure. The currency didn’t get any help as Canadian GDP posted a flat 0.0%, down from the previous release of 0.3%. Canadian GDP is released monthly, unlike most other developed countries which post GDP on a quarterly basis. The key indicator fell short of the estimate of 0.2% and this could put more pressure on the shaky Canadian dollar. Meanwhile, Canadian inflation levels remain listless, as the Raw Materials Price Index came in at -2.2%, marking its third decline in four readings.

 

USD/CAD for Wednesday, October 1, 2014

USD/CAD October 1 at 15:00 GMT

USD/CAD 1.1183 H: 1.1223 L: 1.1164

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0961 1.1004 1.1124 1.1278 1.1414 1.1493

 

  • USD/CAD was steady in the Asian and European sessions. The pair has posted modest losses in North American trade.
  • 1.1124 is the next support line. 1.1004 is stronger.
  • 1.1278 is a strong resistance line. It has remained intact since March.
  • Current range: 1.1124 to 1.1278

Further levels in both directions:

  • Below: 1.1124, 1.1004, 1.0961, 1.0852 and 1.0775
  • Above: 1.1278, 1.1414, 1.1493 and 1.1669

 

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in short positions on Wednesday, reversing the direction seen a day earlier. This is consistent with the movement of the pair, as the Canadian dollar has posted slight gains. The ratio has a majority of short positions, indicating trader bias towards the Canadian dollar continuing to move to higher ground.

 

USD/CAD Fundamentals

  • 12:15 US ADP Nonfarm Employment Change. Estimate 207K. Actual 213K.
  • 13:45 US Final Manufacturing PMI. Estimate 58.0 points. Actual 57.5 points.
  • 14:00 US ISM Manufacturing PMI. Estimate 58.6 points. Actual 56.6 points.
  • 14:00 US Construction Spending. Estimate 0.5%. Actual -0.8%.
  • 14:00 US ISM Manufacturing Prices. Estimate 56.8 points. Actual 59.5 points.
  • 14:30 US Crude Oil Inventories. Estimate 0.6M. Actual -1.4M.
  • All Day – US Total Vehicle Sales. Estimate 16.9M.

* 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.