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USD/CAD – Range Trading Continues As Loonie Stays Close to 1.10

USD/CAD ended last week with a whimper, and we are seeing more of the same on Monday. In the North American session, the pair is trading quietly in the high-1.10 range. In economic news, the highlight of the day is ISM Non-Manufacturing PMI. The indicator jumped to a six-month high. There are no Canadian releases on Monday.

US employment releases looked excellent on Friday. Nonfarm Payrolls jumped to 288 thousand, easily beating the estimate of 216 thousand. The Unemployment Rate kept pace, dropping to 6.3%, its lowest level since September 2008. At the same time, the participation rate in the labor force dropped, so slack remains in the US job market, despite the strong releases in April.

The ISM Non-Manufacturing PMI, which provides data about the services sector, impressed the markets as it climbed to 55.2 points, beating the estimate of 54.3 points. This marked the indicator’s highest level since October, as it continues to point to expansion in the services sector. The 50-point level separates expansion from contraction.

As expected, the Federal Reserve trimmed its QE program by $10 billion on Wednesday. This marks the fourth cut since December, reducing the asset purchase scheme to $45 billion/month. The tapers are no longer creating headlines as they did just a few months ago, and the dollar didn’t get any lift against its major rivals. What interested the markets more was the Fed statement that interest rates would remain low for a “considerable time” after QE ends [1]. The markets expect QE to wind up before the end of the year, so we could see a rate hike in early 2015, depending of course, on the strength of the US economy and the job market.


USD/CAD for Monday, May 5, 2014

Forex Rate Graph 21/1/13

USD/CAD May 5 at 14:25 GMT

USD/CAD 1.0969 H: 1.0987 L: 1.0959


USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0777 1.0852 1.0906 1.10 1.1094 1.1177


Further levels in both directions:


OANDA’s Open Positions Ratio

USD/CAD ratio is almost unchanged in Monday trading. This is reflected in the lack of movement we are seeing from the pair. The ratio has a majority of long positions, indicative of a trader bias in favor of the US dollar breaking out and moving to higher ground.

USD/CAD is not showing much activity, as the pair continues to trade slightly below the 1.10 line. In the North American session, the pair has edged lower.


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 [5]

Market Analyst at OANDA [6]
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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