USD/CAD has posted slight gains on Wednesday, as the pair trades at 1.3860 in the European session. In economic news, today’s highlight is US Pending Home Sales, with the markets expecting the indicator to improve to 0.6%. There are no Canadian events scheduled for this week.
CB Consumer Confidence sparkled on Tuesday, as the key indicator jumped to 96.5 points, up sharply from 90.4 points a month earlier. This easily beat the estimate of 93.9 points. This follows a solid UoM Consumer Sentiment, which improved to 92.6 points, above the forecast of 92.1 points and marking a 4-month high. Consumer confidence indicators are closely monitored by analysts, as stronger consumer confidence often translates into increased consumer spending, a key driver of economic growth. Strong consumer demand has been an important factor in the strength of the US economy, which led to the historic rate hike by the Federal Reserve last week.
December hasn’t provided the Canadian dollar with any holiday cheer, as the currency has plunged almost 600 points against the mighty US dollar. USD/CAD is trading close to 11-year lows, as the pair trades within striking distance of the symbolic 1.40 line. Recent key data has not failed to impress, as Canada’s economy continues to struggle. Canada’s GDP for October came in at a flat 0.0%, pointing to a lack of economic growth. Although by no means an impressive reading, this was an improvement over the September reading of -0.5%. Core Retail Sales followed suit, also posting a flat reading of 0.0%. There are no real surprises in these weak figures, as the Canadian economy has been hit hard by the steep decline in oil prices in 2015, particularly in oil-producing areas locations such as Alberta. This situation has hurt the Canadian dollar, a commodity-based currency. Will the Canadian dollar strike the 1.40 level before the New Year?
Wednesday (Dec. 30)
- 15:00 US Pending Home Sales. Estimate 0.6%
- 15:00 US Crude Oil Inventories. Estimate -1.8M
USD/CAD for Wednesday, December 30, 2015
USD/CAD December 30 at 10:25 GMT
USD/CAD 1.3874 H: 1.3875 L: 1.3828
- USD/CAD was flat in the Asian session and has posted slight gains in European trade.
- 1.3865 is providing support. It is a weak line.
- There is resistance at the round number of 1.40.
- Current range: 1.3865 to 1.40
Further levels in both directions:
- Below: 1.3865, 1.3757, 1.364o and 1,3555
- Above: 1.40, 1.4165 and 1.4310
OANDA’s Open Positions Ratio
USD/CAD ratio is showing some movement towards long positions. Short positions still retain a commanding majority (70%), indicative of trader bias towards USD/CAD moving lower.
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