USD/CAD – Canadian Dollar Strengthens as Ivey PMI Jumps

The Canadian dollar has started the week with strong gains, as USD/CAD has dipped below the 1.12 line in Monday’s North American session. The Canadian currency received a boost from an excellent Canadian Ivey PMI, which jumped to 58.6 points. There are no US events on Monday.

Canadian releases started the week on a positive note, as Ivey PMI improved to 58.6 points, up sharply from 50.9 points a month earlier. The strong reading easily beat the estimate of 53.4, as the index hit its highest level in 11 months. Meanwhile, Canadian Trade Balance disappointed on Friday, posting its first deficit since June. The indicator came in at -0.6 billion C$, way off the estimate of 1.5 billion. Together with strong US jobs data, the Canadian dollar was hit hard and fell over 100 points on Friday.

US employment data sparkled on Friday. Nonfarm Employment change rebounded in September, climbing to 248 thousand. This exceeded expectations of 216 thousand. The unemployment rate dipped to 5.9%, the first time it’s been below the 6% threshold in over six years. With QE slated to end later this month, the focus will shift to the timetable for an interest rake hike. Strong job numbers such as these could put pressure on the Fed to make an interest rate move sooner rather than later.

USD/CAD for Monday, October 6, 2014

USD/CAD October 6 at 13:50 GMT

USD/CAD 1.1208 H: 1.1262 L: 1.1202

 

USD/CAD Technical

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

 

  • USD/CAD has posted losses in the Asian and European session. The pair is unchanged in North American trade.
  • 1.1124 is providing strong support.
  • 1.1278 is the next 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 Monday. This is consistent with the pair’s movement, as the Canadian dollar has posted gains. The ratio has a majority of short positions, indicating trader bias towards the Canadian dollar moving to higher ground.

USD/CAD Fundamentals

  • 14:00 Canadian Ivey PMI. Estimate 53.4 points. Actual 58.6 points.

* 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.