USD/CAD – Loonie Shows Little Change After Sharp Canadian Housing Numbers

The Canadian dollar is showing little change against the US currency in Tuesday. USD/CAD is trading in the mid-1.05 range in the North American session. In Tuesday’s releases, Canada posted Housing Starts, and the indicator looked sharp, easily beating the estimate. It’s a quiet day in the US, with just two releases. NFIB Small Business Index missed the estimate, while JOLTS Job Openings edged above the forecast. The markets are keeping a close eye on the Federal Reserve, which releases the minutes of its last policy meeting on Wednesday.

For the second time in as many days Canadian numbers were positive. On Tuesday, it was the turn of Housing Starts, which easily beat expectations. The indicator posted a strong reading of 200 thousand new starts, identical to the June release. This was well above the estimate of 189 thousand, and points to an improving housing sector. On Monday, Building Permits recorded a healthy gain of 4.5%, which was well above the forecast of 2.6%. As well, the Bank of Canada released its quarterly Business Outlook Survey, which provides a snapshot of business sentiment about the Canadian economy. The report found that businesses remain wary about an uncertain economy, and are also concerned about slow growth south of the border. Business investment continues to grow slowly, which is weighing on the economy.

In the US, the employment picture has brightened, and the dollar got a boost on Friday, thanks to a solid Non-Farm Payrolls release. The key indicator hit a four-month high, posting 200 thousand new jobs. This was well above the estimate of 163 thousand. Earlier in the week, Unemployment Claims came in just below the estimate. There are two factors which have contributed to the dollar’s broad strength. First, last week’s strong employment data points to an improving US economy. Second, there is increased likelihood that the Federal Reserve could taper QE, which would be a dollar-positive event.

Eurozone financial ministers met on Monday, and decided to release more bailout aid to Greece, but with a catch, as only part of the scheduled tranche of 8.1 billion euros will be transferred to Athens. Under the new arrangement, Greece will receive 3 billion euros in July and additional funds in August and October. The Eurogroup decision to give Greece only a portion of the funds currently reflects growing unease with the lack of progress by Athens in implementing the bailout conditions, including improved tax collection and cuts to the bloated public service. Greece has been put on notice that it will have to show more progress in economic restructuring before the troika releases more bailout funds.


USD/CAD for Tuesday, July 9, 2013

Forex Rate Graph 21/1/13
USD/CAD July 9 at 14:30 GMT

USD/CAD 1.0556 H: 1.0574 L: 1.0514


USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0337 1.0442 1.0502 1.0573 1.0652 1.0705


USD/CAD continues to edge lower, as the pair trades in the mid-1.05 range. On the downside, the pair continues to receive support at 1.0502, which is protecting the 1.05 level. This is followed by a stronger support level at 1.0442. The pair faces resistance at 1.0573. This is weak line, and was tested by the pair in the Asian session. It could fall if the US dollar pushes higher. There is stronger resistance at 1.0652.

  • Current range: 1.0502 to 1.0573


Further levels in both directions:

  • Below: 1.0502, 1.0442, 1.0337, 1.0282, 1.0229 and 1.0157
  • Above: 1.0573, 1.0652, 1.0705, 1.0780 and 1.0853


OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to movement towards long positions in the Tuesday session. This is reflected in the recent movement by the pair, as the US dollar has pushed higher in the North American session, after giving up some ground to the Canadian dollar earlier in the day.  Short positions continue to enjoy a substantial majority of the open positions, indicating a strong trader bias towards the loonie recovering and moving higher.

Canada has posted some strong housing and construction numbers this week, but so far, the Canadian dollar has not been able to translate this into gains against the US dollar. Wednesday’s highlight is the Federal Reserve Minutes, and we could see some volatility from the pair, depending on the market’s reaction to this major release.


USD/CAD Fundamentals

  • 11:30 US NFIB Small Business Index. Estimate 96.2 points. Actual 93.5 points.
  • 12:13 Canadian Housing Starts. Estimate 189K. Actual 200K.
  • 14:00 US JOLTS Job Openings. Estimate 3.81M. Actual 3.83M.


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

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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