It promises to be a very quiet start to the new month of September, as the US and Canadian markets are closed for the Labor Day holiday. USD/CAD is trading in the mid-1.05 range in Monday trading. There are no releases out of either country on Monday.
The markets displayed some volatility last week in anticipation of an expected US military strike against Syria, after a chemical attack in the war-torn country killed hundreds However, the attempt by the US to secure a coalition ran into trouble, and President Obama said on the weekend that he will seek Congressional approval before taking any action against Syria. With Congress in recess until September 9th, a military strike could be delayed until mid-September or even later. Meanwhile, the markets have now settled down as we begin the new trading week.
When will the Federal Reserve taper QE? The Federal Reserve has not given any hints, and recent statements from Fed policymakers underscore divisions regarding the timing of such a move. What is clear is that stronger US numbers will increase the likelihood of the Fed acting sooner rather than later. This means that US releases, especially employment data, will be under the market microscope and traders should be prepared for the Fed to begin tapering at any time, which will likely bolster the US dollar.
September could be a rough month for the Canadian dollar. Risk assets such as the loonie tend to display volatility in the fall, and the increasing speculation about QE tapering as well as a possible US strike on Syria could drag down the Canadian dollar. The Canadian economy has not been able to keep pace with the US, leaving room for USD/CAD to continue to rise.
USD/CAD for Monday, September 2, 2013
USD/CAD 1.0532 H: 1.0544 L: 1.0517
- USD/CAD is showing little movement in Monday trading as it trades in the mid-1.05 range.
- The pair is receiving support from 1.0502, which is protecting the 1.05 line. This is followed by a support line at 1.0442.
- USD/CAD continues to face resistance at 1.0573. This is followed by resistance at 1.0652. This line has remained intact since October 2011.
- 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 continues to be made up of a large majority of short positions. This indicates a strong trader bias towards the Canadian dollar posting gains against the US currency.
The pair continues to trade quietly in the mid-1.05 range. With the US and Canadian markets closed for a holiday, we can expect range trading from USD/CAD during the North American session.
- There are no US or Canadian releases on Monday.
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.