USD/CAD – Canadian Dollar Steady After Recent Slide

USD/CAD is steady on Monday, as the pair trades in the mid-1.10 range in the North American session. The Canadian dollar is coming off a rough week in which it lost about 200 points to its US cousin. In economic news, the Empire State Manufacturing Index jumped to 27.5 points in August, well above expectations. There are no Canadian releases on Monday.

US numbers wrapped up last week on a high note. Core Retail Sales improved to 0.3%, edging above the estimate of 0.2%. Retail Sales posted a nice gain of 0.6%, well above the estimate of 0.3%. There was excellent news from the UoM Consumer Sentiment, which bounced back from a weak reading in July and improved to 84.6 points, its best showing since November 2012. The forecast stood at 83.2 points. These indicators point to an increase in consumer confidence and spending, which underscore a deepening economic recovery.

US employment data disappointed on Thursday. Unemployment Claims rose to 315 thousand, the largest number of claims in 10 weeks. The reading was much higher than the estimate of 306 thousand. This follows soft numbers from JOLTS Job Openings and a dismal Nonfarm Payrolls last week. The troubling job numbers are unlikely to affect the Fed’s plan to continue trimming QE later this week, but a soft labor market could postpone plans to raise interest rates by mid-2015.

Canada continues to suffer from weak inflation levels, which point to an underperforming economy. This was underscored by a weak reading from the New Housing Price Index last week, which dipped to 0.0%, the first time the indicator has failed to post a gain in 2014. The index also points to weak demand in the housing sector, which is a critical component of economic growth. On Tuesday, we’ll get a look at Manufacturing Sales. The markets are expecting a strong gain of 1.1%. If the indicator can meet or beat the prediction, the Canadian dollar could get a much-needed boost.

USD/CAD for Monday, September 15, 2014

USD/CAD September 15 at 15:10 GMT

USD/CAD 1.1063 H: 1.1099 L: 1.1056

USD/CAD Technical

• USD/CAD was flat in the Asian session. The pair moved lower in European trading and is steady in the North American session.
• 1.1124 remains a strong resistance line.
• 1.1004 is an immediate support line. 1.0961 is next.
• Current range: 1.1004 to 1.1124

Further levels in both directions:

• Below: 1.1004, 1.0961, 1.0852, 1.0775 and 1.0678
• Above: 1.1124, 1.1278, 1.1414 and 1.1669

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in short positions on Monday. This is consistent with the movement of the pair, as the Canadian dollar has posted modest gains. The ratio is close to an even split of long and short positions, indicating a lack of trader bias as to what direction the pair will take next.

USD/CAD Fundamentals

• 12:30 US Empire State Manufacturing Index. Estimate 16.4 points. Actual 27.5 points.
• 13:15 US Capacity Utilization Rate. Estimate 79.3%. Actual 78.8%.
• 13:15 US Industrial Production. Estimate 0.4%. Actual -0.1%.

* Key releases are in highlighted 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.