USD/CAD – US Dollar Edges Higher after Consumer Confidence Release

USD/CAD has edged higher in Tuesday trading. In the North American session, the pair is trading at the  1.03 line. In economic news, Canadian inflation indicators beat their estimates. Over in the US, CB Consumer Confidence missed the estimate but remained above the 80-point level.

On Tuesday, Canadian inflation numbers looked good, as RMPI came in at 0.3%, beating the estimate of 0.0%. IPPI followed suit, also posting a gain of 0.3%. The estimate stood at 0.1%. In the US, CB Consumer Confidence, a key release, dropped slightly to 80.3 points. This was short of the estimate of 81.1 points, but with a reading of above 80 points, the indicator remains in very high territory in comparison to the levels we saw earlier in 2013. Keeping in mind that last week’s UoM Consumer Sentiment hit a multi-year high, consumer confidence is looking rosy in the US. The key question is will stronger consumer confidence translate into more borrowing and spending, which would bolster job growth and increase economic activity.

Over in the US, the direction of the housing sector is unclear, with recent releases pointing in all directions. On Monday, Pending Home Sales pointed to a decline of -0.4%, certainly not a strong release. Last week, Existing home sales fell to 5.08 million, way off the estimate of 5.27 million. However, New Home Sales showed strength, jumping from 476 thousand to 496 thousand, easily beating the estimate of 482 thousand. This was its best showing in five years. So where do we stand? With these inconclusive results, the markets will have to wait for the August housing releases, which hopefully will provide a clearer picture of the health and direction of the US housing industry.

 

USD/CAD for Tuesday, July 30, 2013

Forex Rate Graph 21/1/13
USD/CAD July 30 at 14:45 GMT

USD/CAD 1.0298 H: 1.0303 L: 1.0258

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0157 1.0229 1.0282 1.0337 1.0442 1.0502

 

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 1.0337. This is a weak line, and could break if the loonie loses any ground. This is followed by stronger resistance at 1.0442. On the downside, 1.0282 is providing support. This is followed stronger support at 1.0229.

  • Current range: 1.0282 to 1.0337

 

Further levels in both directions:

  • Below: 1.0282, 1.0229, 1.0157, 1.0062 and 1.00
  • Above: 1.0337, 1.0442, 1.0502, 1.0573, 1.0652

 

OANDA’s Open Positions Ratio

USD/CAD ratio continues to point to movement towards long positions in Tuesday trading. This is reflected in the pair’s current movement, as the US dollar has posted gains against the Canadian currency. Long positions enjoy a substantial majority, indicating a strong bias amongst traders in favor of the US dollar continuing to push higher.

USD/CAD has broken out of some range trading, as the greenback has climbed to the 1.03 line. If the US dollar does post further gains, these are likely to be modest in nature.

 

USD/CAD Fundamentals

  • 12:30 Canadian RMPI. Estimate 0.0%. Actual 0.3%.
  • 12:30 Canadian IPPI. Estimate 0.0%. Actual 0.3%.
  • 13:00 US S&P/CS Composite-20 HPI. Estimate 12.4%. Actual 12.2%.
  • 14:00 US CB Consumer Confidence. Estimate 81.1 points. Actual 80.3 points.

 

*Key releases are highlighted in bold

*All release times are GMT

 

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.