USD/CAD – Steady as US Housing Data Slides

USD/CAD has posted small gains on Monday, as the pair trades in the low-1.16 range in the North American session. On the release front, it’s a very quiet day, with just one event on the calendar. US Existing Home Sales was unexpectedly weak, sliding to 4.93 million in November. There are no Canadian releases on Monday.

It was a disappointing start to the week for US releases, as Existing Home Sales fell to 4.93 million in November, its lowest level in six months. The markets had expected a reading of 5.21 million. The weak reading followed the October release of 5.26 million, which was its best showing in over a year. USD/CAD has shown little movement to start off the week, but this could well change on Tuesday, as Canada releases GDP. The US will also release GDP as well as Core Durable Goods Orders.

On Friday, Canadian numbers disappointed. Core CPI declined 0.2%, while CPI declined 0.4%. Both readings marked a 4-month low. Core Retail Sales edged higher to 0.2%, up from 0.0%. Retail Sales came in at a flat 0.0%, beating the estimate but much lower than the previous release of 0.8%.

The US dollar made broad gains last week after the Federal Reserve Policy Statement, although the Canadian dollar managed to hold its own against the greenback following the Fed statement. Previous 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.

USD/CAD for Monday, December 22, 2014

USD/CAD December 22 at 15:40 GMT

USD/CAD 1.1633 H: 1.1641 L: 1.1578

 

USD/CAD Technical

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

 

  • USD/CAD lost ground in the Asian session. The pair recovered and continued to make gains in European trade, putting pressure on resistance at 1.1669. The pair is stable in North American trade.
  • 1.1493 continues to provide strong support.
  • On the upside, 1.1669 is a weak resistance line. Will it break during 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 Monday. This is not consistent with the movement of the pair, as USD/CAD has posted gains. The ratio has a majority of short positions, indicative of trader bias towards USD/CAD moving to lower ground.

USD/CAD Fundamentals

  • 15:00 US Existing Home Sales. 5.21M. Actual 4.93M.

*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.