USD/CAD – Flat As Canadian Retail Sales Slip

The Canadian dollar continues to have an uneventful week as USD/CAD trades in the mid-1.10 range in Wednesday’s North American session. Canadian retail sales numbers dropped in March, but did matched expectations. South of the border, US New Home Sales was dismal, sliding to an eight-month low.

Canadian Core Retail Sales, one of the most important economic indicators, posted a 0.6% gain, down from 1.0% a month earlier. However, this did match the estimate. It was a similar story with Retail Sales, which dropped from 1.3% to 0.5% in March, matching the forecast. On Tuesday, Wholesale Sales jumped 1.1% in March, beating the estimate of 0.7%. It marked the best showing by the indicator since last November.

In the US, New Home Sales was a disaster, as the key indicator plunged to 384 thousand in March, down from 440 thousand in the previous release. The weak reading was nowhere near the estimate of 455 thousand, and marked an eight-month low for the key housing indicator. The housing sector is showing signs of weakness, as both New Home Sales and Existing Home Sales have been on a sustained downward trend.

The markets haven’t reacted to events in Ukraine so far, but that could change if the violence in the east of the country worsens. Russian President Vladimir Putin has threatened to act on his “right” to invade Ukraine, and has also given the country an ultimatum regarding its gas debt. The gas supply from Russia to western Europe is in danger, and if the situation spills out of control, we could see a sharp response from the markets. US Vice-President Joe Biden is in Kiev for a symbolic visit. The West doesn’t have many cards to play against Russia, so every move by Putin will be scrutinized and could impact on the markets.

USD/CAD for Wednesday, April 23, 2014

USD/CAD April 23 at 15:00 GMT

USD/CAD 1.1042 H: 1.1053 L: 1.1018

USD/CAD Technical

• USD/CAD is showing little movement in Wednesday trading.
• The key line of 1.1000 continues to provide support. There is stronger support at 1.0906, which is protecting the 1.09 level.
• 1.1094 is the next resistance line. This is followed by 1.1177.
• Current range: 1.1000 to 1.1094

Further levels in both directions:

• Below: 1.1000, 1.0906, 1.0852, 1.0775 and 1.0706
• Above: 1.1094, 1.1177, 1.1319 and 1.1496

OANDA’s Open Positions Ratio

USD/CAD ratio is almost unchanged on Wednesday. This is reflected in the lack of movement we are seeing from the pair. The ratio is close to an even split, indicating a lack of bias as to what direction the pair will take.

The Canadian dollar continues to show little activity, as it trades in the mid-1.10 range. USD/CAD is unchanged in the North American session.

USD/CAD Fundamentals

• 12:30 Canadian Core Retail Sales. Estimate 0.6%. Actual 0.6%.
• 12:30 Canadian Retail Sales. Estimate 0.5%. Actual 0.5%.
• 13:45 US Flash Manufacturing PMI. Estimate 56.2 points. Actual 54.4 points.
• 14:00 US New Home Sales. Estimate 455K. Actual 384K.
•  14:30 US Crude Oil Inventories. Estimate 2.6M. Actual 3.5M.

*Key releases are highlighted in bold

*All release times are GMT

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