USD/CAD – Canadian Dollar Strengthens on Strong US Job Data

The Canadian dollar has posted gains on Tuesday, as USD/CAD trades in the low-1.14 range in the North American session. On the release front, there was more good news on the US employment front, as JOLTS Job Openings improved to 4.83 million in October. As the Canadian economy is heavily dependent on its southern neighbor, a stronger US economy is good news for Canada. There are no Canadian releases on Tuesday.

US employment data looked superb last week, and the good news continued on Tuesday, as JOLTS Job Openings climbed to 4.83 million, up from 4.74 million a month earlier. This beat the estimate of 4.81 million. On Friday, Nonfarm Payrolls shot up to 321 thousand in November, stunning the markets which had expected a rise of 231 thousand. There was also a rise in wages, which should translate into stronger inflation numbers. The unemployment rate held steady at 5.8%, matching the forecast. The excellent Nonfarm Payrolls should help allay concerns about whether the economy can weather an expected rate increase in 2015.

Canadian data started off the week on a mixed note. Building Permits, which tends to show strong fluctuation, tumbled to 0.7%, compared to a 12.7% gain a month earlier. This fell short of the forecast of 2.1%. There was better news from Housing Starts, which posted a strong gain of 196 thousand, up from 184 thousand in the previous release. However, the reading was short of the estimate of 201 thousand.

 

USD/CAD for Tuesday, December 9, 2014

USD/CAD December 9 at 15:50 GMT

USD/CAD 1.1421 H: 1.1501 L: 1.1398

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.1124 1.1278 1.1414 1.1493 1.1669 1.1723

 

  • USD/CAD tested resistance at 1.493 in the Asian session. The pair posted losses in the European session. This trend has continued in North American trade, with the pair testing support at 1.1414. Will USD/CAD break below this line?
  • On the downside, 1.1414 remains under strong pressure. 1.1278 is stronger.
  • 1.1493 is an immediate resistance line. 1.1669 is next.
  • Current range: 1.414 to 1.1493

Further levels in both directions:

  • Below: 1.1414, 1.1278, 1.1124, 1.1004 and 1.0961
  • Above: 1.1493, 1.1669, 1.1723 and 1.1875

 

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in short positions on Tuesday, continuing the trend we saw a day earlier. This is consistent with the movement of the pair, as the Canadian dollar has posted gains. The ratio has a majority of short positions, indicative of trader towards USD/CAD continuing to lose ground.

USD/CAD Fundamentals

  • 12:30 US NFIB Small Business Index. Estimate 96.6 points. Actual 98.1 points.
  • 15:00 US JOLTS Job Openings. Estimate 4.81M. Actual 4.83M.
  • 15:00 US IBD/TIPP Economic Optimism. Estimate 47.2 points. Actual 48.4 points.
  • 15:00 US Wholesale Inventories. Estimate 0.1%. Actual 0.4%.

* 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

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.