USD/CAD – Canadian Dollar Flirts with 1.20

The Canadian dollar has stabilized on Tuesday, following sharp losses to start off the week. In the North American session, USD/CAD is trading in the mid-1.19 range. The pair is at its highest levels since May 2009, as the tempting target of 1.20 is within striking distance. In today’s releases, the US JOLTS Jobs Openings jumped to 4.97 million, well above expectations. There are no Canadian releases on Tuesday.

US job numbers have looked sharp, and the trend continued on Tuesday, as JOLTS Jobs Openings climbed to 4.97 million, easily beating the forecast of 4.86 million. This is the indicator’s highest level since January 2001. The strong employment numbers are a welcome result of the robust economy, as the deepening recovery fuels demand for more workers. The health of the labor market is an important component of any decision to raise interest rates, so upcoming employment releases will be under the market microscope as the Fed mulls when to raise interest rates.

December employment numbers were much worse in Canada, as Employment Change surprised with a decline of 4.3 thousand, nowhere near the forecast of 10.3 thousand. The unemployment rate remained unchanged at 6.6%. Building Permits, another key release, looked awful with a decline of 13.8%, a 3-month low.

On Monday, the BOC released its business outlook survey, released every quarter. The BOC found that the US recovery should help manufacturers or exporters, but businesses connected to the energy sector are in for a rough ride in 2015, as oil prices continue to take a beating on global markets. The survey found that on balance, there is less optimism about the economic conditions compared to the findings from the autumn survey.

USD/CAD for Tuesday, January 13, 2015

USD/CAD January 13 at 15:55 GMT

USD/CAD 1.1940 H: 1.1994 L: 1.1931

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.1669 1.1723 1.1875 1.1975 1.2096 1.2190

 

  • USD/CAD showed limited movement in the Asian session. The pair posted touched a high of 1.1994 in the European session, as it tested resistance at 1.1975. The pair has lost ground in North American trade.
  • 1.1975 remains a weak resistance line. It could face pressure during the North American session.
  • 1.1875 is an immediate support level.
  • Current range: 1.1875 to 1.1975

Further levels in both directions:

  • Below: 1.1875, 1.1723, 1.1669, 1.1580 and 1.1493
  • Above: 1.1975, 1.2096, 1.2190 and 1.2261

 

OANDA’s Open Positions Ratio

USD/CAD ratio is almost unchanged on Tuesday. This is not consistent with the pair’s movement, as the Canadian dollar has posted gains. The ratio has a majority of long positions, indicative of trader bias towards the pair reversing direction and losing ground.

USD/CAD Fundamentals

  • 12:30 US NFIB Small Business Index. Estimate 98.6 points. Actual 110.4 points.
  • 15:00 US JOLTS Jobs Openings. Estimate 4.86M. Actual 4.97M.
  • 15:00 US IBD/TIPP Economic Optimism. Estimate 48.9 points. Actual 51.5 points.
  • 18:01 US 10-year Bond Auction.
  • 19:00 US Federal Budget Balance. Estimate 3.8B.

*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.