USD/CAD: Little Movement as US Unemployment Claims Sparkles

The Canadian dollar is steady in Thursday’s North American session, as the pair trades in the mid-1.06 range. In economic news, Canadian NHPI fell short of the estimate in the June release. In the US, Unemployment Rate looked sharp, posting its lowest reading in six weeks.

Canadian inflation numbers continue to stumble, pointing to an underperforming economy. New Housing Price Index gained just 0.1% last month, its weakest reading since June. This fell short of the estimate of 0.3%, which is the highest level the indicator has managed to reach in 2014. Meanwhile, Canadian Housing Starts enjoyed an excellent June, coming in at 198 thousand, which was unchanged from the previous reading. This beat the estimate of 191 thousand, and marked the third straight month that the key indicator has surpassed the estimate. The indicator has surpassed the 190 thousand level in three of the past four releases, pointing to strong growth in the construction sector.

In the US, Unemployment Claims dropped, as employment data continues to impress. The key indicator dropped to 304 thousand, well below the estimate of 316 thousand. Employment numbers for June have looked sharp, led by a jump in Nonfarm Payrolls and a drop in the unemployment rate.  The strong employment numbers have increased speculation about an interest rate hike by the Federal Reserve, and remarks by Fed policymakers will be under the market microscope.

The Federal Reserve minutes did not shed much light on when the Fed plans to raise interest rates, but policymakers did agree to wind up the QE scheme by October. The asset purchase program flooded the economy with over $2 trillion, and the Fed has been steadily reducing the program since last December. Winding down QE will require several more tapers by the Fed, but that shouldn’t pose a problem, given the solid employment data the economy has been churning out.

USD/CAD for Thursday, July 10, 2014

USD/CAD July 10 at 15:50 GMT

USD/CAD 1.0662 H: 1.0676 L: 1.0647

USD/CAD Technical

• USD/CAD edged higher late in the Asian session and continued this trend European trading. The pair has retracted slightly in North American trading.
•  1.0678 is a weak resistance line. 1.0775 is stronger.
• 1.0572 is providing the pair with strong support.
• Current range: 1.0572 to 1.0678

Further levels in both directions:

• Below: 1.0572, 1.0414, 1.0271 and 1.0182
• Above: 1.0678, 1.0775, 1.0852 and 1.0961

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in long positions in Thursday trade. This is consistent with the movement of the pair, as the US dollar has posted small gains. The ratio has a majority of long positions, indicative of trader bias towards the US dollar gaining ground.

USD/CAD Fundamentals

• 12:30 Canadian NHPI. Estimate 0.3%. Actual 0.1%.
• 12:30 US Unemployment Claims. Estimate 316K. Actual 304K.
• 14:00 US Wholesale Inventories. Estimate 0.6%. Actual 0.5%.
• 14:30 US Natural Gas Storage. Estimate 92B. Actual 93B.
• 17:01 US 30-year Bond Auction.
• 20:30 US FOMC Member Stanley Fischer Speaks.

*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.