USD/CAD – Stable as Unemployment Claims Jump

USD/CAD is choppy but largely unchanged in Thursday trading. In the North American session, the pair is trading in the mid-1.12 range. In the US, jobless claims disappointed, jumping to 284 thousand. There are no Canadian releases on today’s schedule.

US Unemployment Claims rose to 284 thousand last week, much higher than the previous reading of 264 thousand. However, the markets were not too concerned, as the four-week average, which is less volatile than the weekly release, dipped to 281,000, a 14-year low. Meanwhile, weak inflation levels continue to point to slack in the economy. On Wednesday, this trend continued with soft consumer inflation numbers. CPI rose to +0.1%, an improvement from the previous reading of -0.2%. The estimate stood at 0.0%, so the markets clearly did not have high expectations. It was a similar story from Core CPI, which also posted a 0.1% gain, up from 0.0% a month earlier. This was shy of the forecast of 0.2% but still within expectations.

Canadian Retail Sales, the primary gauge of consumer spending, looked weak in September, posting a decline of 0.3%. This marked a second straight decline and was the weakest showing since January. The markets had anticipated a gain of 0.1%. Retail Sales also came in at -0.3%, shy of the estimate of +0.1%. The markets then shifted their attention to the BOC, which maintained rates at 1.0%, as expected. However, the central bank did remove the word “neutral” from its statement, which was used in the September statement with regard to the BOC’s stance on a rate hike. This helped the loonie recover from sharp losses sustained after the soft Retail Sales Report.

 

USD/CAD for Thursday, October 23, 2014

USD/CAD October 23 at 15:15 GMT

USD/CAD 1.1246 H: 1.1264 L: 1.1207

 

USD/CAD Technical

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

 

  • USD/CAD has been marked by choppy trading during the day. The pair put pressure on resistance at 1.1278 but was unable to break above this line.
  • 1.1124 continues to provide strong support.
  • On the upside, 1.1278 remained intact but faced strong pressure in the Asian and European sessions.
  • 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 is almost unchanged on Thursday. This is consistent with the pair’s movement, which is almost unchanged on the day. The ratio has a majority of short positions, indicating trader bias towards the Canadian dollar breaking out of range and moving to higher ground.

 

USD/CAD Fundamentals

  • 12:30 US Unemployment Claims. Estimate 269K. Actual 283K.
  • 13:00 US HPI. Estimate 0.4%. Actual 0.5%.
  • 13:45 US Flash Manufacturing PMI. Estimate 57.2 points. Actual 56.2 points.
  • 14:00 US CB Leading Index. Estimate 0.8%. Actual 0.9%.
  • 14:30 US Natural Gas Storage. Estimate 97B. Actual 94B.

* 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.