USD/CAD – Canadian Dollar Improves on Sharp Wholesale Sales

The Canadian dollar has posted modest gains on Thursday, as USD/CAD trades at the 1.13 line. On the release front, Canadian Wholesale Sales jumped 1.8% in September. Over in the US, there have been plenty of key events to keep the markets busy. CPI and Core CPI met expectations, as CPI came in at 0.0% and Core CPI posted a gain of 0.2%. Unemployment Claims were almost unchanged, with a reading of 291 thousand. Philly Fed Manufacturing Index soared to 40.8 points and US Existing Home Sales improved to 5.26 million.

USD/CAD posted losses as Canadian Wholesale Sales, a key event, climbed 1.8% in November. This crushed the estimate of 0.7% and marked a 4-month high. Foreign Securities Purchases looked weak in September, with a reading of just C$4.37 billion, compared to C$10.28 billion a month earlier. This was well short of the estimate of C$11.32 billion. We’ll get a look at consumer inflation data on Friday, with the release of Canadian CPI.

US consumer inflation remains weak, but met expectations in November. CPI posted a flat 0.0%, edging above the estimate of -0.1%. Core CPI posted a gain of 0.2%, matching the forecast. Unemployment Claims came in at 291 thousand higher than the estimate of 286 thousand. There was good news as well, as the Philly Fed Manufacturing Index soared to 40.8 points, its highest since March 2011. The estimate stood at 18.9 points. As well, Existing Home Sales improved to 5.26 million, a one year high. The markets had expected a reading of 5.16 million.

The Federal Reserve released its minutes on Wednesday and there were no clues about the timing of a rate hike. The markets are expecting rates to rise in the second half of 2015, but this will of course depend on economic conditions. With inflation below the Federal Reserve target of 2%, there is less pressure on the Fed to raise rates. The minutes also noted that weak economic outlooks in Europe and Japan are unlikely to have a negative impact on the US economy.

 

USD/CAD for Thursday, November 20, 2014

USD/CAD November 20 at 16:00 GMT

USD/CAD 1.1303 H: 1.1363 L: 1.1298

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.1004 1.1124 1.1278 1.1414 1.1493 1.1669

 

  • USD/CAD was flat in Asian trade. The pair has lost ground in the European and North American sessions.
  • On the downside, 1.1278 is a weak support level. 1.1124 is stronger.
  • 1.1414 remains a strong resistance line.
  • Current range: 1.1278 to 1.1414

Further levels in both directions:

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

 

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing is unchanged on Thursday. This is not consistent with the movement of the pair, as the Canadian dollar has posted gains. The ratio remains close to an event split between long and short positions, indicative of a lack of trader bias as to what direction USD/CAD will take.

 

USD/CAD Fundamentals

  •  13:30 Canadian Wholesale Sales. Estimate 0.7%. Actual 1.8%.
  • 12:45 US FOMC Member Daniel Tarullo Speaks.
  • 13:30 US CPI. Estimate -0.1%. Actual 0.0%.
  • 13:30 US Core CPI. Estimate 0.2%. Actual 0.2%.
  • 13:30 US Unemployment Claims. Estimate 286K. Actual 291K.
  • 14:45 US Flash Manufacturing PMI. Estimate 56.2 points. Actual 54.7 points.
  • 15;00 US Philly Fed Manufacturing Index. Estimate 18.9 points. Actual 40.8 points.
  • 15:00 US Existing Home Sales. Estimate 5.16M. Actual 5.26M.
  • 15:00 US CB Leading Index. Estimate 0.6%. Actual 0.9%.
  • 15:30 US Natural Gas Storage. Estimate -12B. Actual -17B.
  • 18:30 US FOMC Member Loretta Mester Speaks.

* Key releases are highlighted in 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.