USD/CAD – Stable as Markets Eye Key US Data

USD/CAD is showing little movement on Monday, continuing the trend which characterized the pair for most of last week. In the North American session, the pair is trading at in the mid-1.12 range. In economic news, US Pending Home Sales posted a weak gain of 0.3%, well off the estimate of 1.1%. There are no Canadian releases on today’s schedule. On Tuesday, we could see some activity from the pair, as the US releases two key events – Core Durable Goods Orders and CB Consumer Confidence.

In the US, last week’s jobless numbers were softer than expected. Unemployment Claims rose to 284 thousand, much higher than the previous reading of 264 thousand, and above the estimate of 269 thousand. However, the markets were not overly 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 and Core CPI both posted small gains of 0.1%.

Canadian retail sales numbers were a disappointment last week. 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 Monday, October 27, 2014

USD/CAD October 27 at 15:15 GMT

USD/CAD 1.1244 H: 1.1255 L: 1.1213

 

USD/CAD Technical

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

 

  • USD/CAD continues to trade within range and has been uneventful.
  • 1.1124 continues to provide strong support.
  • On the upside, 1.1278 is a weak line and could face pressure during the day.
  • 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 Monday. This is consistent with the lack of movement displayed by the pair. 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

  • 13:45 US Flash Services PMI. Estimate 57.9 points. Actual 57.3 points.
  • 14:00 US Pending Home Sales. Estimate 1.1%. Actual 0.3%.

* 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.