USD/CAD – Greenback Rally Continues as 1.14 in Sight

USD/CAD has posted gains on Friday, as the pair continues to move higher. The Canadian dollar has slumped over Thanksgiving, losing about 150 points since Thursday. USD/CAD is trading just under the 1.14 line, a 2-week high. On the release front, Canada will release GDP as well as the Raw Materials Price Index. The markets are expecting positive tidings, with the estimate for GDP at 0.4% and a forecast of a 1.5% gain for the RMPI.

Canadian Current Account posted a strong reading in Q3, as the deficit narrowed to C$8.4 billion, compared to C$11.9 billion in Q2. This marked the third consecutive drop in the deficit. Earlier in the week, Canadian Core Retail Sales improved to 0.0% in the September release. Although this was shy of the estimate of 0.4%, the indicator snapped a streak of two declines. Canadian Retail Sales was sharp, posting a 0.8% gain. This beat the estimate of 0.6%, and came after two consecutive declines. Retail Sales is the primary gauge of consumer spending, a key engine of economic growth.

Ahead of the Thanksgiving holiday, the US released a batch of data on Wednesday and the numbers were anything but impressive. Unemployment Claims jumped to 313 thousand, its highest level since mid-September. Core Durable Goods Orders declined 0.9%, its third decline in four readings. The estimate stood at 0.5%. New Home Sales fell to a 3-month low, dropping to 458 thousand. This was short of the estimate of 471 thousand. Pending Home Sales was no better, declining by 1.1%, well off the estimate of 0.9%. There was better news from UoM Consumer Sentiment, which posted a fourth straight gain, rising to 88.8 points. However, this was short of the estimate of 90.2 points. Despite the weak numbers, market sentiment towards the US economy remains high, and the US dollar has posted a strong rally against its Canadian counterpart.

USD/CAD for Friday, November 28, 2014

USD/CAD November 28 at 11:00 GMT

USD/CAD 1.1389 H: 1.1393 L: 1.1335

 

USD/CAD Technical

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

 

  • USD/CAD was calm in the Asian session and posted gains late in the session. The pair is steady in European trade.
  • 1.1278 is providing strong support. 1.1124 is stronger.
  • 1.1414 has weakened and is under strong pressure. 1.1493 is stronger.
  • Current range: 1.1278 to 1.1414

Further levels in both directions:

  • Below: 1.1278, 1.1124, 1.1004, 1.0961 and 1.0886
  • Above: 1.1414, 1.1493, 1.1669 and 1.1723

 

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in short positions on Friday. This is not consistent with the movement of the pair, as the US dollar continues to post gains. The ratio is showing a majority of short positions, indicative of trader bias towards the Canadian dollar recovering from its sharp slide.

USD/CAD Fundamentals

  • 13:30 Canadian GDP. Estimate 0.4%.
  • 13:30 Canadian RMPI. Estimate 1.5%.
  • 13:30 Canadian IPPI. Estimate 0.3%.

* 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.