USD/CAD – Canadian Dollar Jumps on Weak US Data

The Canadian dollar has posted strong gains on Thursday, as USD/CAD trades at the 1.25 line in the North American session. On the release front, the Canadian New Housing Price Index was unchanged, posting a gain of 0.1%. In the US, major releases were dismal. Core Retail Sales declined by 0.9% and Retail Sales followed suit with a drop of 0.8%. Unemployment Claims climbed sharply to 304 thousand.

In the US, retail sales pointed to sharp declines. Core Retail Sales declined by 0.9%, while Retail Sales dropped by 0.8%. Both were well off their estimates of -0.4%. There was no relief from unemployment claims, which jumped to 304 thousand, compared to 284 thousand in the previous reading. The markets had expected a stronger reading of 282 thousand. The Canadian dollar took advantage of the weak US data and has gained over 100 points on the day.

USD/CAD for Thursday, February 12, 2015

USD/CAD February 12 at 16:00 GMT

USD/CAD 1.2499 H: 1.2646 L: 1.2439

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2261 1.2387 1.2469 1.2543 1.2680 1.2761

 

  • USD/CAD was flat in the Asian session. The pair lost ground in the European session. USD/CAD continues to record losses in North American trade, and has broken through support at 1.2543.
  • 1.2543 has reverted to a resistance role after strong gains by the Canadian dollar. It is a weak line and could see further action during the North American session. 1.2680 is stronger.
  • 1.2469 is a weak support level. 1.2387 is stronger.
  • Current range: 1.2469 to 1.2543

Further levels in both directions:

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

 

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in long positions on Thursday, continuing the direction seen a day earlier. This is consistent with the pair’s movement, as strong gains by the Canadian dollar have led to short positions being covered and hence a percentage increase of open long positions. The ratio remains close to a split between long and short positions, reflecting a lack of trader bias as to what direction the pair will take next.

USD/CAD Fundamentals

  • 13:30 Canadian NHPI. Estimate 0.2%. Actual 0.1%.
  • 13:30 US Core Retail Sales. Estimate -0.4%. Actual -0.9%.
  • 13:30 US Retail Sales. Estimate -0.4%. Actual -0.8%.
  • 13:30 US Unemployment Claims. Estimate 282 thousand. Actual 304K.
  • 15:00 US Business Inventories. Estimate 0.2%. Actual 0.1%.
  • 15:30 US Natural Gas Storage. Estimate -165B. Actual -160B.
  • 18:01 US 30-year Bond Auction.

*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.