USD/CAD – Steady after US Retail Sales Edges Higher

USD/CAD is steady as we begin the new trading week. The pair was trading just below the 1.01 line early in Monday’s North American session. In economic news, US Retail Sales edged up 0.1%, while Core Retail Sales declined by 0.1%. There are no Canadian releases on Monday. US retail sales numbers did not show much movement on Monday. Core Retail Sales posted a second straight decline, as it fell by 0.1%, matching the forecast. Retail Sales fared slightly better, jumping from -0.4% to 0.1%. This beat the estimate of -0.3%.

On Friday, the Federal Budget Balance posted solid numbers, as the indicator bounced back from a deficit of $106.5 billion, recording a surplus of $112.9 billion. This easily beat the forecast of $108.3 billion.  Canadian Employment Change rebounded nicely, after posting an awful reading of -54.5 thousand in April. The May release climbed to 12.5 thousand new jobs, but this fell short of the estimate of 14.8 thousand. This has helped USD/CAD continue its late-week rally, as the pair has pushed into 1.01 territory. The Canadian Unemployment Rate remained unchanged at 7.2%, matching the forecast.

After a bad streak in April, we are seeing better numbers out of the US, notably employment figures. This has raised speculation that the Fed might adjust or even terminate its QE program, in which it buys $85 billion in assets every month. Terminating the QE program is dollar positive, and the US dollar was broadly stronger against all the major currencies on Friday. The markets will be looking for any clues as to the Fed ending QE, which would likely push the dollar higher.  

USD/CAD for Monday, May 13, 2013

1.0089 H: 1.0133 L: 1.0083  

USD/CAD Technical

USD/CAD is trading quietly as we begin the new  trading week. and pushed just above the 1.01 level. The pair is receiving weak support at 1.0041. The is a stronger support level at the all important parity line. On the upside, the  pair is facing resistance at the round number of 1.01. This line was breached earlier, and could face more activity. This is followed by resistance at 1.0157.

• Current range: 1.0041 to 1.01  

Further levels in both directions:

• Below: 1.0041, 1.00, 0.9930 and 98.42
• Above: 1.01, 1.0157, 1.0229, 1.0282 and 1.0337

 OANDA’s Open Positions Ratio

USD/CAD is pointing to movement towards short positions in the Monday session. We are not seeing this movement from the pair, which is not showing much movement. The activity in the ratio could  be an early indication that the pair will push downwards and the loonie will post gains against the US dollar.

USD/CAD is trading quietly at the 1.01 level and today’s US retail sales releases appear to have had little impact on the pair. With no other major releases today, it could be a quiet start to the week.

 USD/CAD Fundamentals

• 12:30 US Core Retail Sales. Estimate -0.1%. Actual -0.1%.
• 12:30 US Retail Sales. Estimate -0.3%. Actual 0.1%.
• 14:00 US Business Inventories. Estimate 0.3%.

  *Key releases are highlighted in bold

*All release times are GMT  

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