USD/CAD – Quiet Trading Continues Close to 1.05 Line

USD/CAD continues to show little movement in Tuesday trading. The pair is trading slightly above the 1.05 line early on in Tuesday’s North American session. In economic news, US releases finally got back on track with strong manufacturing and consumer confidence numbers. The Richmond Manufacturing Index hit a sixteen-month high, while CB Consumer Confidence soared to its highest level in over five years. In Canada, Corporate Profits looked weak, posting a second straight decline.

US numbers got off to a rough start this week, as Core Durable Goods Orders and Durable Goods Orders both posted declines. There was better news from the manufacturing sector on Tuesday, as the Richmond Manufacturing Index jumped from -7 to 14 points in August, its best performance since April 2012. CB Consumer Confidence climbed from 80.3 points to 81.5 points in the August reading. This beat the estimate of 79.5 and was the indicator’s best showing since January 2008.

When will the US Federal Reserve scale down QE? That is the million dollar question which continues to preoccupy the markets. The release last week of the FOMC didn’t provide any hints, but appeared to confirm that QE tapering is a question of “when” rather than “if”. The minutes showed that Fed policymakers favor scaling back the bond-buying program, but are divided on the timing of such a move. The policymakers stated that recent US economic data was “mixed”, and all members agreed that it was still too early to scale back the current bond-buying levels of $85 billion each month. QE is a dollar-positive event, so traders should prepare for the US currency to post gains against the major currencies when the Fed decides to taper. Meanwhile, the continuing uncertainty over QE tapering has boosted the US dollar, raised the yields on US treasury bonds and had worldwide repercussions, such as causing jittery investors to pull billions of dollars out of emerging markets.


USD/CAD for Tuesday, August 27, 2013

Forex Rate Graph 21/1/13
USD/CAD August 27 at 14:55 GMT

USD/CAD 1.05o9 H: 1.0540 L: 1.0501


USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0337 1.0442 1.0502 1.0573 1.0652 1.0758


  • USD/CAD is showing little movement in Tuesday trading. The pair touched a high of 1.0540 in the European session but has retracted in North American session, trading just above the 1.05 line.
  • USD/CAD continues to face resistance at 1.0573. This is followed by a resistance line at 1.0652. This line has remained intact since October 2011.
  • On the downside, the pair is again testing support at 1.0502. This line could break if the Canadian dollar improves. This is followed by support at 1.0442.
  • Current range: 1.0502 to 1.0573


Further levels in both directions:

  • Below: 1.0502, 1.0442, 1.0337 and 1.0282
  • Above 1.0573, 1.0652, 1.0758 and 1.0888


OANDA’s Open Positions Ratio

USD/CAD ratio is almost unchanged in Tuesday trading. This is reflected in the current movement of the pair, which has shown very little movement.

USD/CAD has stayed very close to the 1.05 line since last week, as key US releases have not affected the pair. We could see a quiet North American session, with the pair continuing to trade close to 1.05.


USD/CAD Fundamentals

  • 12:30 Canadian Corporate Profits. Actual 0.8%.
  • 13:00 US S&P/CS Composite-20 HPI. Estimate 11.9%. Actual 12.1%.
  • 14:00 US CB Consumer Confidence. Estimate 79.6 points. Actual 81.5 points.
  • 14:00 US Richmond Manufacturing Index. Estimate -7 points. Actual 14 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

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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