USD/CAD is showing little movement on Tuesday, as the pair trades in the mid-1.06 range early in the North American session. On the release front, the ISM Manufacturing PMI was almost unchanged in June and met expectations. Trading is expected to be thin on Tuesday, with Canadian markets closed for a national holiday.
Canadian GDP had another weak outing in May. The key indicator, which is released each month, came in at just 0.1%, unchanged from a month earlier. This was shy of the estimate of 0.2%, and points to weak economic activity. The weak GDP comes on the heels of week inflation numbers from Canada’s manufacturing industry. The Raw Materials Price Index has been dropping, and the downward trend continued in May, as the index came in at -0.4%, way off the estimate of +1.3%. The Industrial Product Price Index followed suit with a reading of -0.5%, compared to the estimate of +0.4%.
In the US, the week started out in impressive style, as Pending Home Sales jumped 6.1%, crushing the estimate of 1.4%. This was the strongest gain since May 2013. US Housing numbers were excellent last month, as New Home Sales and Existing Home Sales both beat their estimates. Last week’s dismal Q1 GDP reading has weighed on the US dollar, so the currency could lose ground if the markets aren’t happy with this week’s numbers.
US Final GDP in Q1 was much worse than expected, but more recent US releases have been stronger, notably housing data and consumer confidence. The markets are keeping a close eye on Wednesday’s ADP Nonfarm Payrolls, which precedes the official Nonfarm Payrolls. The latter is one of the most important economic indicators, so the ADP release could be a harbinger of what to expect from Nonfarm Payrolls at the end of the week.
USD/CAD for Tuesday, July 1, 2014
USD/CAD July 1 at 14:45 GMT
USD/CAD 1.0657 H: 1.0678 L: 1.0652
- On the upside, 1.0678 remains under strong pressure. 1.0775 is stronger.
- 1.0572 is providing the pair with strong support. This is followed by support at 1.0414.
- Current range: 1.0572 to 1.0678
Further levels in both directions:
- Below: 1.0572, 1.0414 and 1.0271
- Above: 1.0678, 1.0706, 1.0775 and 1.0852
OANDA’s Open Positions Ratio
USD/CAD ratio is almost unchanged in Tuesday trade, continuing the trend we’ve seen since last week. This is consistent with the lack of movement from the pair. The ratio has a majority of long positions, indicative of trader bias towards the US dollar breaking out and moving higher.
- 12:00 US Treasury Secretary Jack Lew Speaks.
- 13:45 US Final Manufacturing PMI. Estimate 57.5 points. Actual 57.3 points.
- 14:00 US ISM Manufacturing PMI. Estimate 55.6 points. Actual 55.3 points.
- 14:00 US Construction Spending. Estimate 0.5%. Actual 0.1%.
- 14:00 US IBD/TIPP Economic Optimism. Estimate 48.9 points. Actual 45.6 points.
- 14:00 US ISM Manufacturing Prices. Estimate 60.0 points. Actual 58.0 points.
- All Day – US Total Vehicle Sales. Estimate 16.5M.
*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.