USD/CAD – Stable Ahead of Canadian CPI

The Canadian dollar is steady on Friday, as USD/CAD trades in the mid-1.12 range. We could see some volatility from the pair, with a host of key events on the schedule. Canada releases Core CPI and CPI. In the US, it’s another busy day, with the release of Building Permits and the UoM Consumer Sentiment. As well, Federal Reserve Chair Janet Yellen will deliver remarks at an event in Boston.

Canadian manufacturing data was a big disappointment on Thursday, as Manufacturing Sales tumbled 3.3%, well of the estimate of -1.6%. This marked the key indicator’s biggest drop in over five years. The Canadian dollar did soften after the release, and was fortunate to close the day almost unchanged. Elsewhere, Foreign Securities Purchases posted a strong reading of 10.3 billion C$, easily exceeding the estimate of 4.31 billion.

Earlier in the week, US retail sales and inflation numbers sagged. Core Retail Sales dipped 0.2%, its first decline since April 2013. It was a similar story with Core Retail Sales, which posted a decline of 0.3%, its first loss since January. This points to a decrease in consumer spending, a key component of economic growth. Meanwhile, PPI fell by 0.1%, after a reading of 0.0% a month earlier. All three events missed their estimates.

There was better news on Thursday, as US Unemployment Claims dropped to 264 thousand, marking a 14 -year low. The estimate stood at 286 thousand. Manufacturing numbers were a mix, as Industrial Production gained 1.0%, its best showing since November. The Philly Fed Manufacturing Index dipped to 20.7 points, but this beat the estimate of 19.9 points.

USD/CAD for Friday, October 17, 2014

USD/CAD October 17 at 11:25 GMT

USD/CAD 1.1232 H: 1.1267 L: 1.1228

 

USD/CAD Technical

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

 

  • USD/CAD has edged lower in choppy trading.
  • On the downside, 1.1224 is providing strong support.
  • 1.1278 is a weak resistance line. 1.1414 is stronger.
  • Current range: 1.1124 to 1.1278

Further levels in both directions:

  • Below: 1.1124, 1.1004, 1.0961 and 1.0865
  • Above: 1.1278, 1.1414, 1.1493 and 1.1669

 

OANDA’s Open Positions Ratio

USD/CAD ratio has a majority of short positions, indicating trader bias towards the Canadian dollar gaining ground.

 

USD/CAD Fundamentals

  • 12:30 Canadian Core CPI. Estimate 0.1%.
  • 12:30 Canadian CPI. Estimate 0.0%.
  • 12:30 US Building Permits. Estimate 1.04M.
  • 12:30 US Fed Chair Janet Yellen Speaks.
  • 12:30 US Housing Starts. Estimate 1.02M.
  • 13:55 US Preliminary UoM Consumer Sentiment. Estimate 84.3 points.
  • 13:55 US Preliminary UoM Inflation Expectations.

* 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.