USD/CAD – Flat Ahead of Canadian, US Employment Numbers

USD/CAD is almost unchanged on Friday, as the pair trades in the mid-1.14 range. It’s been a miserable week for the Canadian currency, which has lost about 250 points since last Friday. We’re likely to see the pair show some movement later in the day, as Canada releases Employment Change and the Unemployment Rate. At the same time, the US will release Nonfarm Employment Change and the Unemployment Rate. Later in the day, Fed Chair Janet Yellen will speak at an event in Paris, France.

Canadian key numbers were a mix on Thursday. Building Permits climbed 12.7%, crushing the estimate of 5.2%. The indicator bounced back from a dismal reading of -27.3% last month. This positive reading was tempered by the Ivey PMI report, which tumbled to 51.2 points, down from 58.6 a month earlier. The markets had expected a much stronger figure of 59.2 points.

With the US recovery continuing to deepen, employment numbers continue to improve. This trend was underscored on Thursday, as Unemployment Claims fell to 278 thousand. This was better than the estimate of 285 thousand and marked a three-week low. This strong figure comes on the heels of the ADP Nonfarm Payrolls report, which climbed to 230 thousand, its strongest showing in 2014. The week wraps up with the official Nonfarm Payrolls release on Friday. The markets are expecting a downturn, with the estimate standing at 229 thousand. Will the key indicator surprise the markets and beat the forecast? If so, we could see some volatility in the currency markets.

USD/CAD for Friday, November 7, 2014

USD/CAD November 7 at 10:35 GMT

USD/CAD 1.1429 H: 1.1446 L: 1.1421

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.1124 1.1278 1.1414 1.1493 1.1669 1.1723

 

  • USD/CAD has been uneventful in the Asian and European sessions, as the pair remains rangebound.
  • 1.1414 remains a weak support line. 1.1278 is stronger.
  • On the upside, 1.1493 is an immediate resistance line.
  • Current range: 1.1414 to 1.1493

Further levels in both directions:

  • Below: 1.1414, 1.1278, 1.1124, 1.1004 and 1.0961
  • Above: 1.1493, 1.1669, 1.1723 and 1.1875

 

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in short positions on Friday, reversing the direction seen a day earlier. This is not consistent with the pair’s movement, as USD/CAD 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

  • 00:05 US FOMC Member Loretta Mester Speaks.
  • 13:30 Canadian Employment Change. Estimate -3.9K.
  • 13:30 Canadian Unemployment Rate. Estimate 6.8%.
  • 13:30 US Nonfarm Employment Change. Estimate 235K.
  • 13:30 US Unemployment Rate. Estimate 5.9%.
  • 13:30 US Average Hourly Earnings. Estimate 0.2%.
  • 15:15 US Fed Chair Janet Yellen Speaks.
  • 19:00 US Consumer Credit. Estimate 16.6B.
  • 19:30 US FOMC Member Daniel Tarullo Speaks.

* 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.