USD/CAD – Canadian Dollar Improves on Weak US Durables

The Canadian dollar is flexing some muscle on Tuesday, as USD/CAD has dropped to a two-week low. Early in the North American session, the pair is trading in the mid-1.11 range. In economic news, it’s been a mixed story in the US. Core Durable Goods Orders looked weak, posting a decline of 0.2%. However, CB Consumer Confidence sparkled, jumping to 94.5 points in September. There are no Canadian releases on Tuesday.

In the US, durable goods looked dismal. Core Durable Goods Orders dropped 0.2%, its second decline in three months. This was well short of the estimate of 0.5%. Durable Goods Orders followed suit with a decline of -1.3%. This was a second straight decline, and missed the estimate of 0.4%. There was much better news from CB Consumer Confidence, as the indicator climbed to 94.5 points, up sharply from 86.0 points. The easily beat the estimate of 87.4 and marked a 7-year high.

The Federal Reserve will be at center stage on Wednesday, as a two-day meeting wraps up with the release of a policy statement. The Fed is expected to wind up QE, and if policymakers delay this move, the dollar will likely take a hit against its major rivals. The markets will also be looking for hints regarding the timing of a rate hike, which is expected sometime in 2015. Traders should treat this release as a market-mover which could have a significant impact on the currency markets.

 

USD/CAD for Tuesday, October 28, 2014

USD/CAD October 28 at 14:05 GMT

USD/CAD 1.1171 H: 1.1251 L: 1.1167

 

USD/CAD Technical

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

 

  • USD/CAD pointed lower in the Asian session, and this trend has continued in the European and North American sessions.
  • 1.1124 is an immediate support level.
  • On the upside, 1.1278 has strengthened as the Canadian dollar has lost ground.
  • 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 Tuesday, continuing the trend which started the week. This is not consistent with the movement of the pair, as the Canadian dollar has posted strong gains. The ratio has a majority of short positions, indicating trader bias towards the Canadian dollar continuing to move to higher ground.

 

USD/CAD Fundamentals

  • 12:30 US Core Durable Goods Orders. Estimate +0.5%. Actual -0.2%.
  • 12:30 US Durable Goods Orders. Estimate +0.4%. Actual -1.3%.
  • 13:00 S&P/CS Composite-20 HPI. Estimate 5.7%. Actual 5.6%.
  • 14:00 US Richmond Manufacturing Index. Estimate 11 points. Actual 20 points.
  • 14:00 US CB Consumer Confidence. Estimate 87.4 points. Actual 94.5 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.