USD/CAD – Little Movement Ahead of Key US Data

The Canadian dollar has lost ground on Friday, as USD/CAD trades in the mid-1.15 range in the North American session. On the release front, there are two major events out of the US – Producer Price Index and the UoM Consumer Sentiment. The inflation index is expected to show a small decline, but the markets are anticipating the consumer confidence report to continue its upward trend. There are no Canadian releases on Friday.

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.

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 Friday, December 12, 2014

USD/CAD December 12 at 9:05 GMT

USD/CAD 1.1538 H: 1.1559 L: 1.1522

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.1278 1.1414 1.1493 1.1669 1.1723 1.1875

 

  • USD/CAD has showed slight movement in the Asian and European sessions.
  • 1.1493 remains a weak support level. 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 Friday, continuing the trend we saw a day earlier. This is not consistent with the movement of the pair, which has shown little movement. The ratio has a majority of short positions, indicative of trader bias towards USD/CAD reversing direction and heading lower.

USD/CAD Fundamentals

  • 13:30 US PPI. Estimate -0.1%.
  • 13:30 US Core PPI. Estimate 0.1%.
  • 14:55 US Preliminary UoM Consumer Sentiment. Estimate 89.6 points.
  • 14:55 US Preliminary UoM Inflation Expectations.

* 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.