USD/CAD – Limited Movement as Canadian Data a Mix

The Canadian dollar is steady on Wednesday, as the pair trades in the mid-1.18 range in the North American session. On the release front, there were a host of key readings in both Canada and the US. Canada posted a trade deficit of $0.6 billion, and Ivey PMI weakened to 55.4 points. In the US, the ADP Nonfarm Employment Change looked sharp, climbing to 241 thousand. Trade Balance also had a strong showing, as the trade deficit narrowed to $39.0 billion.

US data looked strong on Wednesday. ADP Nonfarm Employment Change, the first employment release of the week, surged to 241 thousand, well above the estimate of 227 thousand. This was the best showing from the indicator since June. Meanwhile, the US trade deficit narrowed to-$-39.0 billion, the smallest deficit in 11 months.

Canada posted a trade deficit for the first time in 3 months, with a reading of $-0.6 billion. The estimate stood at $-0.2 billion. Ivey PMI posted a strong reading of 55.4 points, easily beating the forecast of 55.3 points. Earlier in the week, the Raw Materials Price Index continued to point downwards. The index came in at – 5.8% in November, its fifth straight decline. The estimate stood at -4.6%. Softer demand for raw materials is due to weak consumer demand as well as the global slowdown, which has put a dent in the export sector.

USD/CAD for Wednesday, January 7, 2015

USD/CAD January 7 at 16:30 GMT

USD/CAD 1.1864 H: 1.1868 L: 1.1813

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.1580 1.1669 1.1723 1.1875 1.1975 1.2096

 

  • USD/CAD has shown choppy movement on Wednesday. The pair continues to put pressure on resistance at 1.1875.
  • 1.1723 is a strong support level.
  • 1.1875 is a weak line. Will the pair break through during the North American session? 1.1975 is stronger.
  • Current range: 1.1723 to 1.1875

Further levels in both directions:

  • Below: 1.1723, 1.1669, 1.1580, 1.1493 and 1.1414
  • Above: 1.1875, 1.1975, 1.2096 and 1.2190

 

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in short positions on Wednesday, reversing the direction seen a day earlier. This is not consistent with the pair’s movement, as the US dollar has posted small gains. The ratio has a majority of short positions, indicative of trader bias towards the Canadian dollar moving to higher ground.

USD/CAD Fundamentals

  • 13:15 US ADP Nonfarm Employment Change. Estimate 227K. Actual 241K.
  • 13:30 US Trade Balance. Estimate -42.3B. -39.0B.
  • 15:30 US Crude Oil Inventories. Estimate 0.9M. Actual -3.1M.
  • 19:00 US FOMC Meeting Minutes.
  • 23:30 FOMC Member Charles Evans 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.