USD/CAD – Steady as US, Canadian GDP Beat Estimates

The Canadian dollar is holding its own on Tuesday, as USD/CAD trades in the low-1.16 range in the North American session. On the release front, Canadian GDP edged lower to 0.3%, but beat the estimate. In the US, it was a very busy day, ahead of the Christmas holiday. Final GDP soared in the third quarter, with a gain of 5.0%, but Core Durable Goods Orders dropped by 0.4%. New Home Sales disappointed, dropping sharply to 438 thousand.

Canadian GDP, which is released monthly, posted a gain of 0.3%. This was shy of the previous release of 0.4%, but still beat the forecast of 0.1%. The reading was an improvement after Friday’s inflation and retail sales reports. 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%.

In the US, there were a host of key events, with mixed results. GDP was red-hot in Q3, jumping 5.0%, ahead of the estimate of 4.6%. This marked the indicator’s strongest gain since the third quarter of 2003. The US economy is expected to continue to surge in 2015, driven by increased consumer spending and lower oil prices. The news was not as positive from Core Durable Goods Orders, which posted a decline of 0.4%, its fourth decline in five readings. The reading was well off the estimate of 1.1%. Durable Goods Orders looked even worse, with a reading of -0.7%. This surprised the markets which had anticipated a strong gain of 3.0%. Elsewhere, housing data continues to weaken as New Home Sales slipped to 438 thousand, its poorest showing since July. This was well short of the forecast of 461 thousand.

USD/CAD for Tuesday, December 23, 2014

USD/CAD December 23 at 15:50 GMT

USD/CAD 1.1611 H: 1.1666 L: 1.1610

 

USD/CAD Technical

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

 

  • USD/CAD edged lower in the Asian session and was flat for most of the Europeans session. The pair has shown some stronger movement in North American trade, climbing close to resistance at 1.1669 before retracting.
  • 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 unchanged on Tuesday. This is not consistent with the movement of the pair, as USD/CAD has posted losses. The ratio has a majority of short positions, indicative of trader bias towards USD/CAD continuing to move to lower ground.

USD/CAD Fundamentals

  • 13:30 US Core Durable Goods Orders. Estimate 1.1%. Actual -0.4%.
  • 13:30 US Final GDP. Estimate 4.3%. Actual 5.0%.
  • 13:30 US Durable Goods Orders. Estimate 3.0%. Actual -0.7%.
  • 13:30 US Final GDP Price Index. Estimate 1.4%. Actual 1.4%.
  • 14:00 US HPI. Estimate 0.3%. Actual 0.6%.
  • 14:55 US Revised UoM Consumer Sentiment. Estimate 93.5 points. Actual 93.6 points.
  • 14:55 US Revised UoM Inflation Expectations. Actual 2.8%.
  • 2:59 US Richmond Manufacturing Index. Estimate 8 points. Actual 7 points.
  • 15:00 US New Home Sales. Estimate 461K. Actual 438K.
  • 15:00 US Core PCE Price Index. Estimate 0.1%. Actual 0.0%.
  • 15:00 US Personal Spending. Estimate 0.5%. Actual 0.6%.
  • 15:00 US Personal Income. Estimate 0.6%. Actual 0.4%.

*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.