USD/CAD – Little Movement on Mixed US Data

The Canadian dollar has shown some movement on Thursday but is largely unchanged on the day, as USD/CAD trades in the low-1.16 range. In the US, Unemployment Claims dropped to 289 thousand, beating expectations. The Philly Fed Manufacturing Index fell to 24.5 points in December, short of the estimate. There are no Canadian releases on Thursday.

In the US, employment numbers continued to impress, as unemployment claims dropped to 289 thousand, the lowest level in six weeks. The easily beat the estimate of 297 thousand. The news was not as good on the manufacturing front, as the Philly Fed Manufacturing Index slid to 24.5 points, down from 40.6 points in November. The November reading was unusually high, and the markets had expected a sharp downturn, with the estimate standing at 26.3 points.

All eyes were on the Federal Reserve on Wednesday, as the Fed released its monthly policy statement. Previous Fed policy statements have usually stated that the Fed would maintain low rates for a “considerable time”, but the December statement changed terminology, saying the Fed would be “patient” before raising rates. In a follow-press conference, Federal Reserve chair Janet Yellen was less ambiguous, saying that the Fed was unlikely to raise rates for the “next couple of meetings”. The markets took this to mean that a rate hike is in the works, although not before April. The Canadian dollar showed some volatility on Wednesday but was almost unchanged on the day.

Canadian Wholesales Sales was unexpectedly weak in October, as the key indicator slipped to 0.1%, compared to a strong gain of 1.8% a month earlier. The estimate stood at 0.9%. On Tuesday, Canadian Manufacturing Sales declined by 0.6%, compared to a gain of 2.1% in the previous release. Despite these poor key releases, the Canadian dollar has managed to hold its own against its US counterpart.

USD/CAD for Thursday, December 18, 2014

USD/CAD December 18 at 15:55 GMT

USD/CAD 1.1628 H: 1.1646 L: 1.1569

 

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 posted losses in the European session but then reversed directions. USD/CAD has edged higher in North American trade.
  • 1.1493 continues to provide strong support.
  • On the upside, 1.1669 is a weak line. Will the pair break through in the North American session? 1.1723 is next.
  • 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 almost unchanged on Thursday. This is not consistent with the movement of the pair, as the Canadian dollar is almost unchanged on the day. The ratio has a majority of short positions, indicative of trader bias towards USD/CAD moving to lower ground.

USD/CAD Fundamentals

  • 13:30 US Unemployment Claims. Estimate 297K. Actual 289K.
  • 14:45 US Flash Services PMI. Estimate 57.1 points. Actual 53.6 points.
  • 15:00 US Philly Fed Manufacturing Index. Estimate 26.3 points. Actual 24.5 points.
  • 15:00 US CB Leading Index. Estimate 0.6%. Actual 0.6%.
  • 15:30 US Natural Gas Storage. Estimate -61B. Actual -64B.

*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.