USD/CAD is unchanged as we begin the new trading week. The pair is trading in the high-1.02 range in the North American session. Monday has a very light schedule, with just one release – US Pending Home Sales. The key indicator disappointed posted a decline, but still beat the estimate. There are no Canadian releases on Monday.
The Canadian dollar has been chipping away against its US cousin recently. Last week, USD/CAD dropped below the 1.03 line for the first time since late-June, buoyed by strong Canadian retail sales numbers. The two currencies continue to engage in a see-saw battle around the 1.03 level, and currently the pair finds itself slightly below the 1.03 line. We could see some movement from the pair when Canada releases GDP, one of the most important economic indicators, on Wednesday.
The markets got another look at US housing numbers, and the picture certainly seems a confusing one. Earlier today, Pending Home Sales declined by 0.4%, ending a steak of three consecutive gains. However, this figure was considerably better than the estimate of -1.1%. Last week, Existing Home Sales dropped from 5.18 million to 5.08 million, way off the forecast of 5.27 million. However, New Home Sales soared on Wednesday, jumping from 476 thousand to 496 thousand, well above the estimate of 482 thousand. This was the key housing indicator’s best performance in five years. So what to make of this key releases, which are pointing in all directions? It looks like the markets will have to wait for the August housing releases to get a better handle on the direction of the US housing industry.
US consumer confidence is very high, at least according to UoM Consumer Sentiment, which was released on Friday. The indicator rose from 84.1 to 85.1 points, its highest level since July 2007. US consumers are clearly feeling good about the economy, but will this translate into stronger spending and more jobs? The markets will have to wait for data from these and other sectors to see if a happier consumer is indeed leading to greater economic activity.
USD/CAD for Monday, July 29, 2013
USD/CAD 1.0270 H: 1.0287 L: 1.0267
USD/CAD continues to trade close to the 1.03 line. The pair touched above 1.03 in the Asian session, but then retracted. USD/CAD faces resistance at 1.0282. This is a weak line, and could break if the loonie loses any ground This is followed by stronger resistance at 1.0282. On the downside, 1.0229 is providing support. This line has held since mid-June. This is followed by a support level at 1.0157.
- Current range: 1.0229 to 1.0282
Further levels in both directions:
- Below: 1.0229, 1.0157, 1.0062 and 1.00
- Above: 1.0282, 1.0337, 1.0442, 1.0502, 1.0573, 1.0652
OANDA’s Open Positions Ratio
USD/CAD ratio is showing some movement towards long positions in Monday trading. This is not reflected in the pair’s current movement, as we continue to see almost no movement from the pair. If the movement in the ratio continues, it could be an early sign that the US dollar could break out and move upwards.
USD/CAD continues to trade very quietly, close to the 1.03 line. Will the drifting continue? The pair shrugged off a weak US housing release, and we could see the inactivity continue through the day.
14:00 US Pending Home Sales. Estimate -1.1%. Actual -0.4%.
*Key releases are highlighted in bold
*All release times are GMT