USD/CAD – Steady as US Manufacturing Data Slips

The Canadian dollar is steady on Tuesday, as USD/CAD trades in the mid-1.24 range. On the release front, Canadian Foreign Securities Purchases was unexpectedly weak, coming in at CAD -13.55 billion. In the US, the Empire State Manufacturing Index slipped to 7.8 points, missing expectations.

Canadian Foreign Securities Purchases, which is closely linked to currency demand, looked dismal in December, with a reading of CAD -13.55 billion. This was well off the forecast of CAD 5.35 billion, its worst reading in six months. On Wednesday, we’ll get a look at Wholesale Sales, a key indicator of consumer spending.

In the US, Empire State Manufacturing Index slipped to 7.8 points in February, down sharply from 10.0 points a month earlier. The markets had expected a reading of 8.9 points. This weak reading follows last week’s disappointing reports from retail sales and consumer confidence. On Wednesday, we could see some movement from USD/CAD with the release of three key events – the Federal Reserve minutes, Building Permits and PPI.

USD/CAD for Tuesday, February 17, 2015

USD/CAD February 17 at 15:35 GMT

USD/CAD 1.2436 H: 1.2477 L: 1.2362

USD/CAD Technical

• USD/CAD showed little movement in the Asian session. The pair posted sharp drops in European trade, testing support at 1.2387. The pair has recovered much of those losses in the North American session.
• 1.2387 is an immediate support level.
• 1.2469 is a weak resistance line. 1.2543 is stronger.
• Current range: 1.2387 to 1.2469

Further levels in both directions:

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

OANDA’s Open Positions Ratio

USD/CAD ratio is almost unchanged on Tuesday. This is not consistent with the pair’s movement, as the Canadian dollar has posted modest losses. The ratio is pointing to a majority of long positions, indicative of trader bias towards the Canadian dollar reversing directions and moving higher.

USD/CAD Fundamentals

• 13:30 Canadian Foreign Securities Purchases. Estimate +5.35B. Actual -13.55B.
• 13:30 US Empire State Manufacturing Index. Estimate 8.9 points. Actual 7.8 points.
• 15:00 US NAHB Housing Market Index. Estimate 58 points. Actual 55 points.
• 21:00 US TIC Long-Term Purchases. Estimate 41.3B.

*Key releases are highlighted in bold

*All release times are GMT

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