USD/CAD – Canadian Dollar Strengthens, US Housing Data Jumps

The Canadian dollar has posted gains on Tuesday, as USD/CAD trades in the low-1.12 range in the North American session. On the release front, it’s a very quiet day, with no Canadian events on the schedule. In the US, the sole release was Existing House Sales. The important indicator climbed to 5.17M, up from 5.05M last month, its best performance in a year. The strong reading easily beat the estimate of 5.11M.

Canadian releases started the week in good form, as Wholesale Sales posted a gain of 0.2%, matching the forecast. The indicator bounced back from a decline of 0.3% in the previous release. Meanwhile, inflation levels remain very low, weighing on the Canadian economy. On Friday, Core CPI slipped to 0.2%, down from 0.5% a month earlier. The estimate stood at 0.1%. CPI posted a weak gain of 0.1%, edging above the estimate of 0.0%.

US releases wrapped up the week on a high note, as UoM Consumer Sentiment climbed to 86.4 points, its highest reading since July 2007. The markets had expected a reading of 84.3 points. This indicates that the US consumer remains optimistic about the economy and is not overly concerned about warnings of a global slowdown. On the housing front, Building Permits and Housing Starts met expectations. Strong US employment numbers continue to drive the US recovery, as US job claims dropped to 264 thousand, marking a 14-year low. The estimate stood at 286 thousand.

 

USD/CAD for Tuesday, October 21, 2014

USD/CAD October 21 at 14:20 GMT

USD/CAD 1.1240 H: 1.1297 L: 1.1205

 

USD/CAD Technical

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

 

  • USD/CAD broke above resistance at 1.1278 early in the Asian session, but then reversed directions. The pair continued to lose ground in the European session. Early in North American trading, the pair has changed directions and has edged higher.
  • 1.1124 continues to provide strong support.
  • 1.1278 was breached earlier in the day but recovered. It remains 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 posted gains in long positions on Tuesday. This is not 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 continuing to gain ground.

 

USD/CAD Fundamentals

14:00 US Existing Home Sales. Estimate 5.11M. Actual 5.17M.

* 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.