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USD/CAD – US Dollar Edges Higher as Unemployment Claims Drop

USD/CAD continues to move higher on  Thursday, as Unemployment Claims looked sharp for a third consecutive week. The pair is trading just below the 1.07 line in the North American session. In the US, Unemployment Claims dropped to a two-month low, while GDP posted its sharpest gain since 2010. Canadian releases were a mix, as Building Permits jumped to a three-month high, while Ivey PMI slipped badly in November.

US data looked very sharp on Thursday. Unemployment Claims posted its lowest number in two months, dropping to 298 thousand. This easily beat the estimate of 328 thousand. Meanwhile, Preliminary GDP, released each quarter, shot up to 3.6% in Q3, its sharpest gain in close to four years. The estimate stood at 3.0%. The excellent releases are likely to fuel speculation about when the Fed might step in with QE tapering.

In Canada, Building Permits posted a sharp gain of 7.4%, improving on the gain of just 1.7% last month. This easily beat the estimate of 1.2%. Ivey PMI tumbled to 53.7 points, down from 62.8 in October. The markets had expected a much stronger reading of 59.0 points. The Canadian dollar has not been able to keep pace with the US currency and remains stuck at three-year lows. Earlier in the week, the Bank of Canada kept its benchmark interest rate at 1.00%. With inflation will below the target of 2.0%, we may not see any changes to rates for some time.

 

USD/CAD for Thursday, December 5, 2013

Forex Rate Graph 21/1/13

USD/CAD December 5 at 15:00 GMT

USD/CAD 1.0688 H: 1.0689 L: 1.0652

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0502 1.0573 1.0652 1.0783 1.0852 1.0945

 

 

Further levels in both directions:

 

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to movement towards long positions in Thursday trading. This is reflected in the current movement of the pair, as the US dollar continues to post gains against the struggling Canadian dollar. A majority of the open positions in the USD/CAD ratio are short, indicating a trader bias towards the Canadian dollar reversing its downward spiral and moving to higher ground.

The Canadian dollar remains under pressure as it trades close to the 1.07 line. With the greenback enjoying some upward momentum, the pair could push into 1.07 territory during the North American session.

 

USD/CAD Fundamentals

 

*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 [4]

Market Analyst at OANDA [5]
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 Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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