USD/CAD – Steady Ahead of Fed Policy Statement

The Canadian dollar is steady on Wednesday, as USD/CAD trades in the mid-1.24 range. In the US, the Federal Reserve will issue its monthly policy statement. Crude Oil Inventories slipped to 8.9 million, but easily beat expectations. There are no Canadian releases until Friday.

The Federal Reserve will be in the spotlight later on Wednesday, with the release of a policy statement at the end of a two-day meeting. The Fed is expected to continue to counsel patience regarding an interest rate hike, and persistently weak inflation means the Fed can take its time before having to make a monetary move. The markets will be combing through the statement and any clues as to the timing of rate hike could shake up the currency markets.

There was mixed numbers out of the US on Tuesday. Durable Goods Orders plunged 3.4%, marking a 4-month low. There was no relief from Core Durable Goods Orders, which declined by 0.8%, its fifth drop in six readings. The markets had expected gains from both indicators. There was much better news later in the day, as CB Consumer Confidence jumped to 102.9 points, crushing the estimate of 95.3 points. New Home Sales followed suit, rising to 481 thousand, well above the forecast of 452 thousand.

USD/CAD for Wednesday, January 28, 2015

USD/CAD January 28 at 17:55 GMT

USD/CAD 1.2433 H: 1.2461 L: 1.2395

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2190 1.2261 1.2387 1.2469 1.2543 1.2680

 

  • USD/CAD edged higher in Asian session. The pair was choppy in the European session and is unchanged in North American trade.
  • 1.2469 is a weak resistance line. 1.2543 is stronger.
  • 1.2387 is an immediate support level.
  • Current range: 1.2387 to 1.2469

Further levels in both directions:

  • Below: 1.2387, 1.2261, 1.2190, 1.2096 and 1.1975
  • Above: 1.2469, 1.2543, 1.2680 and 1.2761

 

OANDA’s Open Positions Ratio

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

USD/CAD Fundamentals

  • 15:30 US Crude Oil Inventories. Estimate 4.2M.
  • 19:00 US FOMC Statement.
  • 19:00 US Federal Funds Rate. Estimate <0.25%

*Key releases are highlighted in bold

*All release times are GMT

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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.