USD/CAD – Canadian Dollar Continues To Falter

The Canadian dollar has resumed its losing ways on Monday, as USD/CAD trades above the 1.16 line in the North American session. On the release front, US manufacturing data was mixed, as the Empire State Manufacturing Index tumbled to -3.6 points, while Industrial Production posted a strong gain of 1.3%. There are no Canadian releases on Monday.

The US ended the week with mixed news, as inflation dipped while consumer confidence jumped. The Producer Price Index, the primary gauge of manufacturing inflation, dropped by 0.2%, its worst showing in six months. The estimate stood at -0.1%.  Meanwhile, UoM Consumer Sentiment moved higher for a fourth straight month, pointing to increased optimism among US consumers. The key indicator soared to 93.8 points, its highest level since January 2007 and well above the forecast of 89.6 points. On Friday, there was good news from retail sales and jobless claims. 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 Monday, December 15, 2014

USD/CAD December 15 at 16:00 GMT

USD/CAD 1.1620 H: 1.1624 L: 1.1548

 

USD/CAD Technical

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

 

  • USD/CAD was uneventful in the Asian session. The pair moved higher in the European session and continues to post gains early in North American trade.
  • 1.1493 is providing strong support.
  • On the upside, 1.1669 has weakened as the US dollar moves higher. 1.1723 is stronger.
  • 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 unchanged on Monday. This is not consistent with the movement of the pair, as the Canadian dollar has lost ground. 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 Empire State Manufacturing Index. Estimate 12.1 points. Actual -3.6 points.
  • 14:15 US Capacity Utilization Rate. Estimate 79.4%. Actual 80.1%.
  • 14:15 US Industrial Production. Estimate 0.8%. Actual 1.3%.
  • 15:00 US NAHB Housing Market Index. Estimate 59 points. Actual 57 points.
  • 21:00 US TIC Long-Term Purchases. Estimate 72.8B.

* 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.