USD/CAD – Canadian Dollar Strengthens as US Manufacturing PMI Slides

The Canadian dollar has reversed its recent slide, posting strong gains on Monday. In the North American session, USD/CAD is trading slightly below the 1.26 line in the North American session. On the release front, ISM Manufacturing PMI continued to soften, slipping to 53.5 points. There are no Canadian releases on Monday.

US releases started the week on a disappointing note, as Manufacturing PMI slipped for a third straight month. The index dropped to 53.5 points in January, short of the forecast of 54.9 points. This weak reading helped the Canadian dollar start the week with a strong rally of over 100 points.

On Friday, US Advance GDP for Q4 disappointed, posting a gain of 2.6%. The markets had anticipated a gain of 3.0%. Still, market sentiment towards the US economy remains positive, underscored by the Federal Reserve statement last week, where the Fed noted solid growth in the economy. The Fed remains on track to raise rates later in 2015, and the US dollar will likely benefit as speculation continues over the timing of a rate hike.

USD/CAD for Monday, February 2, 2015

USD/CAD February 2 at 16:10 GMT

USD/CAD 1.2585 H: 1.2773 L: 1.2568

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2387 1.2469 1.2543 1.2680 1.2761 1.2950

 

  • USD/CAD was flat in the Asian session. The pair posted sharp losses in the European session, easily breaking below support at 1.2680. The pair continues to lose ground in North American trade.
  • 1.2680 has switched to a resistance line following strong gains by the Canadian dollar. It is a strong line.
  • 1.2543 has weakened in support as the pair trades at lower levels. 1.2469 is stronger.
  • Current range: 1.2543 to 1.2680

Further levels in both directions:

  • Below: 1.2543, 1.2469, 1.2387, 1.2261 and 1.2190
  • Above: 1.2680, 1.2761, 1.2950 and 1.3063

 

OANDA’s Open Positions Ratio

USD/CAD ratio is almost unchanged on Monday. This is not consistent with the pair’s movement, as the Canadian dollar has posted strong gains. The ratio is currently an even split between long and short positions, indicative of a lack of trader bias as to what direction the pair will take next.

USD/CAD Fundamentals

  • 13:30 US Core PCE Price Index. Estimate 0.0%. Actual 0.0%.
  • 13:30 US Personal Spending. Estimate -0.1%. Actual -0.3%.
  • 13:30 US Personal Income. Estimate 0.2%. Actual 0.3%.
  • 14:45 US Final Manufacturing PMI. Estimate 54.1 points. Actual 53.9 points.
  • 15:00 US ISM Manufacturing PMI. Estimate 54.9 points. Actual 53.5 points.
  • 15:00 US Construction Spending. Estimate 0.9%. Actual 0.4%.
  • 15:00 US ISM Manufacturing Prices. Estimate 40.1 points. Actual 35.0 points.

*Key releases are highlighted in bold

*All release times are GMT

OANDA MarketPulse Nominated for FXstreet’s 2015 Forex Best Awards

We are pleased to share the news that FXstreet – Europe’s oldest forex trading portal, published online in more than 50 countries – has nominated your MarketPulse team for the “Best Sell-Side Analysis Team” award again this year (the winners in 2014!), as well as in the category of “Best Analysis”.

The annual Forex Best Awards highlight the best analysis, educational content, and contributors on its website from the preceding year. It is a tremendous honour to be considered for this industry accolade out of the thousands of top tier banks and financial blogs online.

However, in order to win these important awards, we need your help – we need you to vote for us.

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.