USD/CAD – Canadian Dollar Slide Continues, Pair Trading Above 1.26

The Canadian dollar continues to lose ground on Thursday. In the North American session, USD/CAD is trading above the 1.26 line and the pair has  jumped over 200 points since early Wednesday. On the release front, US numbers were a mix. Unemployment Claims sparkled, dropping to 265 thousand. However, Pending Home Sales declined 3.7%. There are no Canadian releases on Thursday. On Friday, we’ll get a look at the only Canadian event of the week, GDP. The markets are expecting a decline of 0.1%. A weak reading could send the reeling loonie even lower.

US employment numbers have improved as the economy chugs along. This was underscored by Unemployment Claims, which plunged to 265 thousand, down from 307 thousand a week earlier. This marked the indicator’s lowest level since April 2000. The news was not as positive from Pending Home Sales, which declined 3.7%, its worst reading in a year.

On Wednesday, the Federal Reserve reiterated that it would be “patient” regarding the timeline for a raise in interest rates, which have been close to zero since 2008. However, the Fed gave a vote of confidence to the US economy, noting that the economy was expanding at a “solid pace”. This boosted the US dollar as the Canadian dollar posted sharp losses on Wednesday. The markets expect the Fed to raise rates sometime during the year, so the “Fed rate watch” is sure to continue, as the markets look for clues as to when the Fed will make a move.

USD/CAD for Thursday, January 29, 2015

USD/CAD January 29 at 16:15 GMT

USD/CAD 1.2641 H: 1.2649 L: 1.2511

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2387 1.2469 1.2543 1.2680 1.2761 1.2950

 

  • USD/CAD showed little movement in the Asian and European sessions. The pair has posted sharp gains in North American trade, breaking past resistance at 1.2543.
  • 1.2680 is an immediate resistance line. It could face pressure in the North American session. 1.2761 is next.
  • 1.2543 has switched to support as the pair trades at higher levels. It is a strong line.
  • Current range: 1.2543 to 1.2680

Further levels in both directions:

  • Below: 1.2543, 1.2469, 1.2387, 1.2261 and 1.2190
  • Above: 1.2680, 1.2761, 1.2950 and 1.3063

 

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in short positions on Thursday, continuing the movement we saw a day earlier. This is consistent with the strong gains by the pair, as long positions continue to be covered, resulting in a greater percentage of short positions. The ratio has a majority of short positions, indicative of trader bias towards the Canadian dollar moving to higher ground.

USD/CAD Fundamentals

  • 13:30 US Unemployment Claims. Estimate 301K. Actual 265K
  • 15:00 US Pending Home Sales. Estimate +0.6%. Actual -3.7%
  • 15:30 US Natural Gas Storage. Estimate -113B. Actual -94B

*Key releases are highlighted in bold

*All release times are GMT

OANDA MarketPulse Nominated for FXstreet’s 2015 Forex Best Awards

We are pleased to share the news that FXstreet – Europe’s oldest forex trading portal, published online in more than 50 countries – has nominated your MarketPulse team for the “Best Sell-Side Analysis Team” award again this year (the winners in 2014!), as well as in the category of “Best Analysis”.

The annual Forex Best Awards highlight the best analysis, educational content, and contributors on its website from the preceding year. It is a tremendous honour to be considered for this industry accolade out of the thousands of top tier banks and financial blogs online.

However, in order to win these important awards, we need your help – we need you to vote for us.

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.