USD/CAD – Steady as Canadian Dollar Shrugs Off Weak Manufacturing Data

USD/CAD is almost unchanged in Wednesday trading, as the pair trades in the mid-1.03 range early in the North American session. In economic news, Canadian Manufacturing Sales, a key release, posted a decline of 0.2%, falling short of the estimate of a 0.3% gain. In the US, the NAHB Housing Market Index fell to a four-month low. High-level talks continue in Washington, as the Republicans and Democrats race against the clock to reach an agreement on raising the debt ceiling before Thursday’s deadline.

The debt-limit clock is ticking ever-louder as politicians in Washington scramble to reach an agreement. The US debt stands at $16.7 trillion, and the debt limit will be reached on Thursday if Congress fails to reach an agreement to raise the limit. If the limit is reached, the US treasury will be unable to pay all of the country’s bills. This could lead to the US defaulting on its debt, which could cause chaos in the domestic and international markets. The Republicans have floated proposals which would delay some provisions in President Obama’s healthcare plan. The Democrats have countered that they will only talk about health care once an agreement is reached. With both sides continuing to play hardball, the relative calm we’ve seen in the markets could quickly dissipate if the two sides cannot reach some compromise.

As the politicians in Washington continue to squabble and shoot down rival proposals to end the debt deadlock, Fitch Ratings warned on Tuesday that it could cut the US’s triple AAA rating if the crisis is not resolved. Fitch stated that it would not make any moves before early 2014, but the statement reflects growing frustration in the markets over the continuing inability of Congress to agree on a budget or the raising of the debt ceiling. The well-respected ratings agency has put the US debt on a negative watch and said that the crisis had cast doubt over the credit of the United States and had undermined confidence “in the role of the US dollar as the pre-eminent global reserve currency”.

With the markets transfixed by the crisis in Washington, US economic releases, even major events, have been shunted to the backburners. However, Thursday’s US Unemployment Claims is a key release that could affect the US dollar. With major releases such as Non-Farm Payrolls on hold due to the US shutdown, Unemployment Claims has magnified in its importance. Last week’s release was not considered accurate due to technical problems, so tomorrow’s numbers are being eagerly awaited. The markets are bracing for another weak release, with an estimate of 357 thousand.


USD/CAD for Wednesday, October 16, 2013

Forex Rate Graph 21/1/13

USD/CAD October 16 at 13:50 GMT

USD/CAD 1.0361 H: 1.0384 L: 1.0359


USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0224 1.0282 1.0337 1.0442 1.0502 1.0573


  • USD/CAD is stable in Wednesday trading, as the pair trades in the mid-1.03 range.
  • The pair continues to face resistance at 1.0442. This is followed by a resistance line at 1.0502. This line has remained intact since early September.
  • USD/CAD is receiving support at 1.0337. This is a weak line which could be tested if he Canadian dollar shows any strength. This is followed by a support level at 1.0282.
  • Current range: 1.0337 to 1.0442


Further levels in both directions:

  • Below: 1.0337, 1.0224, 1.0158 and 1.0068
  • Above 1.0442, 1.0502, 1.0573 and 1.0652


OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to movement towards short positions on Wednesday. We are not currently seeing this from the pair, which is almost unchanged. The ratio continues to be made up of a majority of long positions, indicative of a trader bias towards the US dollar moving higher.

USD/CAD continues to have an uneventful week, as the pair trades in the mid-1.03 range. Unless an agreement is reached in the debt limit talks in Congress, we can expect a quiet North American session from the pair.


USD/CAD Fundamentals

  • 12:30 Canadian Manufacturing Sales. Estimate -0.2%. Actual 0.3%.
  • 14:00 US NAHB Housing Market Index. Estimate 58 points. Actual 55 points.
  • 18:00 US Beige Book.
  • 21:30 US FOMC Member Esther George Speaks.


*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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