USD/CAD – Slight Gains as Key US Data Misses Expectations

The Canadian dollar is slightly lower on Wednesday, as USD/CAD trades in the mid-1.24 range. On the release front, Canadian Wholesale Sales posted a strong gain of 2.5%, but the Canadian dollar was unable to take advantage. In the US, Building Permits missed the estimate with a reading of 1.08 million, while PPI posted a sharp decline of 0.8%. Later in the day, the Federal Reserve will release then minutes of its most recent policy meeting.

The first key US readings of the week failed to impress the markets. Building Permits improved to 1.05 million, but this fell short of the estimate of 1.08M. Housing Starts matched the forecast of 1.07 million, down from 1.09 million a month earlier. On the inflation front, PPI was dismal, coming in at -0.8%. This was short of the forecast of -0.4% and marked the indicator’s fourth decline in five months, as the US continues to struggle with weak inflation.

The markets are keeping a close eye on the Fed minutes, which will be released later on Wednesday. With the US economy showing strong growth and positive employment numbers, there are widespread expectations for a rate hike as early as the summer. Any hints regarding a hike could provide a strong boost for the US dollar against its major rivals.

USD/CAD for Wednesday, February 18, 2015

USD/CAD February 18 at 17:40 GMT

USD/CAD 1.2451 H: 1.2466 L: 1.2381

 

USD/CAD Technical

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

 

  • USD/CAD was flat in the Asian session. The pair edged higher in European trade. USD/CAD continues to put pressure on resistance at 1.2469 early in the North American session.
  • 1.2387 remains an immediate support level.
  • 1.2469 is a weak resistance line. Will the pair break through in the North American session? 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 Wednesday, continuing the lack of activity we saw a day earlier. This is consistent with the lack of movement we are currently seeing from the pair. The ratio is pointing to a majority of long positions, indicative of trader bias towards the Canadian dollar breaking above the next resistance line.

USD/CAD Fundamentals

  • 13:30 Canadian Wholesale Sales. Estimate 0.4%. Actual 2.5%.
  • 13:30 US Building Permits. Estimate 1.08M. Actual 1.05M.
  • 13:30 US PPI. Estimate -0.4%. Actual -0.8%.
  • 13:30 US Core PPI. Estimate 0.1%. Actual -0.1%.
  • 13:30 US Housing Starts. Estimate 1.07M. Actual 1.07M.
  • 14:15 US Capacity Utilization Rate. Estimate 79.9%. Actual 79.4%.
  • 14:15 US Industrial Production. Estimate 0.5%. Actual 0.2%.
  • 19:00 US FOMC Meeting Minutes.
  • 21:00 US TIC Long-Term Purchases. US 41.3B.
  • 22:00 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.