USD/CAD – Canadian Dollar Edges Lower on FBI Announcement

USD/CAD has started the week with slight gains. In the North American session, the pair is trading slightly below the 1.34 line. It’s a quiet start to the week, with no major events out of the US. There are no Canadian events on the schedule. On Tuesday, the US releases JOLT Job Openings and the markets will be focusing on the US presidential election.

Canada and the US released job numbers on Friday, and both countries posted solid numbers. US nonfarm payrolls improved to 161 thousand, although this fell short of the forecast of 171 thousand. Average Hourly Earnings rose 0.4%, edging above the estimate of 0.3%. In Canada, the economy added 43.9 thousand jobs, crushing the estimate of a loss of 10.0 thousand. However, all of the gains were part-time jobs as the economy actually shed 23 thousand full time positions. Unemployment rates remained unchanged in both Canada and the US.

The spotlight is on Tuesday’s US presidential election, which will likely dominate the markets throughout the week. Although polls continue to point to a tight race, Clinton appears to have the upper hand, as she has an easier path to garnering the 270 electoral votes needed to claim victory. The Clinton campaign received a boost as the FBI announced that it had no reason to change its conclusion that Clinton was not guilty of criminal wrongdoing in her use of private emails while she was secretary of state. The US dollar posted gains following the FBI announcement, and the greenback could continue to move higher if Clinton wins the election. There are different market scenarios depending on the actual outcome of the election, with the worst case scenario being a too-close-to-call result. If either candidate fails to deliver a decisive victory, the leadership vacuum and uncertainty surrounding the result could trigger higher volatility in the markets. If the election does spark market volatility, the Federal Reserve could hold off from raising interest rates at its next policy meeting in December.

USD/CAD Fundamentals

Monday (November 7)

• 10:00 US Labor Market Conditions Index
• 15:00 US Consumer Credit. Estimate 17.6B
• Tentative – US Loan Officer Survey

Upcoming Key Events

Tuesday (November 8)

• 10:00 US JOLTS Jobs Openings. Estimate 5.67M
• All Day – US Presidential Election

*All release times are EDT

*Key events are in bold

USD/CAD for Monday, November 7, 2016

USD/CAD November 7 at 9:25 GMT

Open: 1.3359 High: 1.3417 Low: 1.3357 Close: 1.3384

USD/CAD Technical

• USD/CAD was flat in the Asian session and has posted slight gains in European trade
• 1.3371 has switched to a support role following gains by USD/CAD
• There is resistance at 1.3457

Further levels in both directions:

• Below: 1.3371, 1.3253, 1.3120 and 1.3028
• Above: 1.3457, 1.3551 and 1.3648
• Current range: 1.3371 to 1.3457

OANDA’s Open Positions Ratio

USD/CAD ratio is showing little movement in the Monday session. Currently, short positions command a strong majority (71%), indicative of trader bias towards USD/CAD reversing directions and moving to lower ground.

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.