The Canadian dollar has edged lower to start the new week, as the currency is back above the 1.10 line In economic news, Canadian Housing Starts improved in February, climbing to three month high. On Friday, US Nonfarm Payrolls looked sharp, hitting a three-month high. However, Canadian Employment Change failed to follow suit, posting a decline. It’s a slow start to the new week, with just a handful of events. The sole US release today is a speech by FOMC member Charles Plosser.
Nonfarm Payrolls wrapped up the week on a high note, as the key employment release jumped to 175 thousand in February, up from 1113 thousand a month earlier, This was well above the estimate of 151 thousand. The Unemployment Rate edged up to 6.7%, slightly above the estimate of 6.6%. With a solid Unemployment Claims earlier last week, the markets can breathe more comfortably as the Fed is likely to take its scissors and trim QE next week for the third time. New York Fed President William Dudley stated last week that the threshold to alter the Fed’s program to wind up QE was “pretty high”. In other words, short of a serious economic downturn in the US economy, we can expect the QE tapers to continue.
Canadian releases started the week on the right foot. Housing Starts improved to 192 thousand, up from 180 thousand a month earlier. This edged above the estimate of 190 thousand. On Friday, Employment Change looked awful, posting its second decline in the past three releases. The indicator came in at -7.0 thousand, way off the estimate of +16.9 thousand. There was no change to the Unemployment Rate, which remains at 7.0%. The Canadian dollar responded to the weak employment news by coughing up 100 points on Friday.
USD/CAD for Monday, March 10, 2014
USD/CAD March 10 at 16:15 GMT
USD/CAD 1.1108 H: 1.1131 L: 1.1089
- USD/CAD has posted modest gains in Monday trading.
- 1.1177 is the next resistance line. It is followed by 1.1319, which has remained intact since July 2009.
- 1.1094 has reverted to a support role after the loonie’s slide last week. It is a weak line and could see activity during the day. Next, there is support at the key line of 1.10.
- Current range: 1.1000 to 1.1094
Further levels in both directions:
- Below: 1.1094, 1.1000, 1.0906, 1.0852 and 1.0783
- Above: 1.1177, 1.1319, 1.1496 and 1.1639
OANDA’s Open Positions Ratio
USD/CAD ratio is posting gains in short positions in Monday trade. This is not consistent with what we are seeing from the pair, as the US dollar has posted gains. The ratio has a majority of short positions, indicating trader bias towards the loonie moving higher.
The pair has moved higher and is back above the 1.10 level. The pair is steady in the North American session.
- 10:15 US FOMC Member Charles Plesser Speaks.
- 12:12 Canadian Housing Starts. Estimate 190K. Actual 192K.
*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.