USD/CAD – US Dollar Punches Past 1.15 on Strong US Numbers

The Canadian dollar has lost ground on Thursday, as USD/CAD trades in the low-1.15 range in the North American session. This is the pair’s highest level since July 2009. On the release front, there was positive news from the US, as all three key events beat expectations. Core Retail Sales posted a 0.5% gain, while Retail Sales climbed 0.7%. Unemployment Claims impressed, dipping to 294 thousand. In Canada, the New Housing Price Index posted a weak gain of 0.1%.

US retail sales reports, the primary gauge of consumer spending, looked sharp in November. Core Retail Sales came in at 0.5%, ahead of the estimate of 0.1%. Not to be undone, Retail Sales posted a gain of 0.7%, beating the estimate of 0.4%. This was the indicator’s strongest showing in 12 months. There was more good news on the job front, as Unemployment Claims dipped to 294 thousand, below the forecast of 299 thousand. On Friday, the US will release PPI and UoM Consumer Sentiment.

Inflation levels remain weak in Canada, pointing to an underperforming economy. On Thursday, the New Housing Price Index came in at 0.1%, unchanged from the previous release. This was just shy of the forecast of 0.2%. Earlier in the week, 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 Thursday, December 11, 2014

USD/CAD December 11 at 15:50 GMT

USD/CAD 1.1527 H: 1.1539 L: 1.1448

USD/CAD Technical

• USD/CAD edged lower in the Asian session. The pair broke above resistance at 1.1493 in the European session and continues to post gains early in North American trade.
• 1.1493 has reverted to a support role as the pair trades at higher levels. 1.1414 is stronger.
• 1.1669 is a strong resistance line. It was last tested in July 2009.
• Current range: 1.1493 to 1.1669

Further levels in both directions:

• Below: 1.1493, 1.1414, 1.1278, 1.1124 and 1.1004
• Above: 1.1669, 1.1723, 1.1875 and 1.1975

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in short positions on Thursday, reversing the trend we saw a day earlier. This is not consistent with the movement of the pair, as the US dollar has posted gains. The ratio has a majority of short positions, indicative of trader bias towards USD/CAD reversing direction and heading lower.

USD/CAD Fundamentals

• 13:00 BOC Governor Stephen Poloz Speaks.
• 13:30 Canadian New Housing Price Index. Estimate 0.2%. Actual 0.1%.
• 13:30 Canadian Capacity Utilization Rate. Estimate 82.9%. Actual 83.4%.
• 13:30 US Core Retail Sales. Estimate 0.1%. Actual 0.4%.
• 13:30 US Retail Sales. Estimate 0.4%. Actual 0.7%.
• 13:30 US Unemployment Claims. Estimate 299K. Actual 294K.
• 13:30 US Import Prices. Estimate -1.7%. Actual -1.5%.
• 15:00 US Business Inventories. Estimate 0.2%. Actual 0.2%.
• 15:30 US Natural Gas Storage. Estimate -45B. Actual -51B.
• 18:01 US 30-year Bond Auction.

* 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.