USD/CAD – Canadian Dollar Higher on Strong Housing Starts

The Canadian dollar has posted gains  on Monday, as USD/CAD trades in the mid-1.24 range in the North American session. On the release front, Canadian Housing Starts improved to 187 thousand. Over in the US, the Labor Market Conditions Index slipped to 4.9 points in January.

USD/CAD is back below 1.25, as Canadian Housing Starts improved to 187 thousand in January, up from 180 thousand a month earlier. This beat the estimate of 184 thousand.

The week ended with strong Canadian numbers. Building Permits, a volatile indicator,  jumped 7.7%, easily beating the forecast of 4.8%. On the employment front, Employment Change climbed 35.4 thousand, crushing the estimate of 4.7 thousand. The unemployment rate remained at 6.6%, beating the estimate of 6.7%.

US releases ended the week with a superb US Nonfarm Payrolls report for January. The key employment indicator improved to 257 thousand in January, up from 252 thousand a month earlier. This easily beat the estimate of 236 thousand. The Federal Reserve has been clear that the employment numbers will have to be strong before a rate hike kicks in, so the strong NFP reading has reinforced expectations for an interest rate in mid-2015, which would be a boost for the US dollar.

USD/CAD for Monday, February 9, 2015

USD/CAD February 9 at 14:35 GMT

USD/CAD 1.2446  H: 1.2523 L: 1.2428

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2190 1.2261 1.2387 1.2469 1.2543 1.2680

 

  • USD/CAD was uneventful in the Asian and European sessions. The pair has posted losses in the North American session, breaking below support levels at 1.2469.
  • 1.2469 continues to see action. The pair has reverted to a resistance role as the pair has dropped to lower levels. 1.2543 is stronger.
  • 1.2387 remains an immediate support level.
  • Current range: 1.2387 to 1.2469

Further levels in both directions:

  • Below: 1.2387, 1.2261, 1.2190, 1.2096 and 1.1975
  • Above: 1.2469, 1.2543, 1.2680, 1.2761, 1.2950 and 1.3063

 

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in short positions. This is consistent with the pair’s movement, as the Canadian dollar has posted gains. The ratio remains close to a 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 Canadian Housing Starts. Estimate 187 thousand. Actual 184 thousand.
  • 15:00 US Labor Market Conditions Index. Actual 4.9 points.
  • 21:00 US FOMC Member Jerome Powell Speaks.

*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.