USD/CAD – Steady as Canadian Retail Sales Plunge

The Canadian dollar is steady on Friday, as USD/CAD trades in the mid-1.24 range. On the release front, Canadian retail sales reports were awful. Core Retail Sales declined by 2.3%, while Retail Sales dropped by 2.0%. The US dollar could take advantage of the weak data and move upwards during the North American session. In the US, the only event on the calendar is Flash Manufacturing PMI.

Key US indicators painted a mixed picture on Thursday. Unemployment Claims rebounded strongly with a sharp drop of 283 thousand, compared to 304 thousand a week earlier. This easily beat the estimate of 293 thousand. The news was not as good from the Philly Fed Manufacturing Index, which slipped to 5.2 points, down from 5.3 points and a third straight drop. The markets had expected a reading of 8.8 points.

On Wednesday, the Federal Reserve released the minutes of its previous policy meeting. The minutes were decidedly dovish in nature, as Fed policymakers raised concerns that a mid-year rate hike could hurt the economic recovery. The Fed also said it was worried about the impact of global events on the US economy, such as the slowdown in China and the Greek financial crisis. With US inflation at low levels, the Fed is not in any rush to raise rates, so speculation of a mid-year rate may have been premature.

USD/CAD for Friday, February 20, 2015

USD/CAD February 20 at 12:40 GMT

USD/CAD 1.2468 H: 1.2493 L: 1.2422

 

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 dropped in the European session, testing resistance at 1.2469. USD/CAD has since moved higher and recovered most of the earlier losses.
  • On the upside, 1.2469 is fluid and could see further action in the North American session. 1.2543 is stronger.
  • 1.2387 is an immediate support line.
  • 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 pointing to gains in short positions on Friday. This is not consistent with the pair’s movement, as the Canadian dollar has posted losses. The ratio is currently split between long and short positions, indicative of a lack of trader bias as to what direction USD/CAD will take next.

USD/CAD Fundamentals

  • 13:30 Canadian Core Retail Sales. Estimate -0.7%. Actual -2.3%.
  • 13:30 Canadian Retail Sales. Estimate -0.3%. Actual -2.0%.
  • 14:45 US Flash Manufacturing PMI. Estimate 53.7 points.

*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.