USD/CAD – Canadian Dollar Subdued Ahead of US Crude Inventories

USD/CAD is showing little movement in the Wednesday session. Currently, the pair is trading at 1.3370. On the release front, it’s another quiet day, with no Canadian events on the schedule. The key event in US is Pending Home Sales, which is expected to rebound with a gain of 2.3%. As well, the US releases Crude Oil Inventories, with the markets forecasting a gain of 1.5 millions barrels. On Thursday, the US releases Final GDP and unemployment claims.

Bank of Canada Governor Stephen Poloz was refreshingly candid in a speech on Tuesday in Oshawa. Poloz hinted that the BoC would not be raising interest rates in the near future, saying that the economy had not yet recovered from the huge drop in oil prices. He added that raising interests rates back to “normal” would have a negative effect on the economy and would likely trigger a recession. The last time the BoE raised rates was in 2010, and analysts don’t forecast another hike before 2018. President Trump’s “America first” stance is a serious concern for Canada, which is heavily reliant on open trade. Poloz criticized Trump’s protectionist agenda, saying that “protectionism does not promote growth and its costs are steep”.

President Donald Trump found himself on the wrong end of the rough-and tumble politics in Washington, as his bill to replace the Affordable Care Act was pulled before it even went to a vote. This was a humiliating setback for Trump, given that the Republicans enjoy a majority in Congress. The bruising defeat has sent the US dollar sharply lower and market jitters higher. Trump’s administration has stumbled out of the starting gate, and after more than two months in office, he has yet to provide any details over even an outline of economic policy. The inquiry into the Trump administration’s links with Russia is gathering steam, and is another cause for concern for nervous investors. Trump has said he will now focus on tax reform, but he has his work cut out, trying to convince a skeptical Congress and general public that he can deliver the goods and push his tax legislation through Congress.

USD/CAD Fundamentals

Wednesday (March 29)

  • 9:20 US FOMC Member Charles Evans Speech
  • 10:00 US Pending Home Sales. Estimate 2.3%
  • 10:30 US Crude Oil Inventories. Estimate 1.2M

Upcoming Key Events

Thursday (March 30)

  • 8:30 US Final GDP. Estimate 2.0%
  • 8:30 US Unemployment Claims. Estimate 244K

*All release times are GMT

*Key events are in bold

USD/CAD for Wednesday, March 29, 2017

USD/CAD March 29 at 8:30 EST

Open: 1.3378 High: 1.3401 Low: 1.3355 Close: 1.3378

USD/CAD Technical

S1 S2 S1 R1 R2 R3
1.3120 1.3253 1.3371 1.3461 1.3551 1.3672
  • USD/CAD was flat in the Asian session and has edged lower in European trade
  • 1.3371 is a weak support level
  • 1.3461 is the next resistance line

Further levels in both directions:

  • Below: 1.3371, 1.3253, 1.3120 and 1.3006
  • Above: 1.3461, 1.3551 and 1.3672
  • Current range: 1.3371 to 1.3461

OANDA’s Open Positions Ratio

USD/CAD ratio is showing limited movement this week. Currently, short positions have a majority (59%), indicative of trader bias towards USD/CAD breaking out and 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 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.