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USD/CAD – Loonie Struggling As US Unemployment Claims Jump

The Canadian dollar continues to lose ground in Thursday trading. In the North American session, USD/CAD is trading in the mid-1.11 range. In economic news, Canadian Current Account posted a wider deficit in January, but managed to beat the estimate. US key releases were a mix, as Core Durable Goods Orders posted a strong gain, but Unemployment Claims came in well above the estimate. The Federal Reserve will be in the spotlight later in the day, as Fed Chair Janet Yellen testifies before a Senate committee.

US manufacturing data looked strong, as Core Durable Goods Orders jumped 1.1% in January. This surprised the markets, which had expected a decline of -0.1%. Unemployment Claims did not look as sharp, as the key indicator rose to 348 thousand, well above the estimate of 333 thousand. Meanwhile, a nasty streak of weak US releases ended on Wednesday as New Home Sales jumped by 468 thousand, crushing the estimate of 406 thousand. It was the key indicator’s best showing since last June, and helped allay concerns about the health of the housing sector, following weak housing numbers last week.

The markets are keeping a close eye on Capitol Hill, as Federal Reserve Chair Janet Yellen testifies before the Senate later on Thursday. Yellen is expected to reiterate that Fed will likely continue trimming QE, barring any downturns in the economy. Last week’s Federal Reserve minutes indicated that interest rates are unlikely to rise, even if unemployment drops to 6.5%. Previously, the Fed had said it would consider raising rates at the 6.5% threshold, but with unemployment falling faster than expected, Federal Reserve policymakers agreed that it would “soon be appropriate” to revise the Fed’s forward guidance regarding interest rate levels, and such a move could shake up the currency markets.

 

USD/CAD for Thursday, February 27, 2014

Forex Rate Graph 21/1/13

USD/CAD February 27 at 15:55 GMT

USD/CAD 1.1150 H: 1.1160 L: 1.1118

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0906 1.1000 1.1094 1.1177 1.1319 1.1496

 

 

Further levels in both directions:

 

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in short positions in Thursday trade. This is not consistent with what we are seeing from the pair, as the Canadian dollar continues to lose ground. The ratio has a majority of short positions, indicating trader bias towards the loonie reversing its current slide.

The wobbly Canadian dollar continues to lose ground on Thursday. The pair has edged higher in 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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