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USD/CAD – Canadian Dollar Dips in Holiday Trade

USD/CAD has posted gains on Monday in light holiday trade. In the European session, USD/ CAD is trading at 1.3880. The Canadian markets are closed for a holiday, and there are no Canadian or US events on the schedule.

Canada’s GDP for October came in at a flat 0.0%, pointing to a lack of economic growth. Although by no means an impressive reading, this was an improvement over the September reading of -0.5%. Core Retail Sales followed suit, also posting a flat reading of 0.0% after a decline of -0.5% a month earlier. There are no real surprises in these weak figures, as the Canadian economy has been hit hard by the steep decline in oil prices, particularly in oil-producing areas locations such as Alberta [1]. This situation has hurt the Canadian dollar, which briefly pushed above the 1.40 level last week, and continues to trade at multi-low levels. The loonie has endured a miserable December, plunging over 500 points against its US counterpart. We are unlikely to see much movement during the last week of 2015, but the Canadian dollar could continue its slide in the New Year.

In the US, November’s durable goods reports were unimpressive, underscoring weakness in the US manufacturing sector. Core Durable Goods slipped by 0.1%, short of the forecast of a 0.1% gain. Durable Goods came in at 0.0%, but this beat the estimate of -0.6%. Housing numbers also disappointed, as New Home Sales dipped to 490 thousand, well off the estimate of 507 thousand. This reading comes on the heels of Existing Home Sales, which posted a weak reading of 4.76 million, its worst performance since April 2014. There was some good news from consumer indicators, as the UoM Consumer Sentiment improved to 92.6 points, above the forecast of 92.1 points and marking a 4-month high.

Monday (Dec. 28)

USD/CAD for Monday, December 28, 2015

USD/CAD December 28 at 12:15 GMT

USD/CAD 1.3887 H: 1.3887 L: 1.3826

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.3640 1.3757 1.3865 1.40 1.4165 1.4310

Further levels in both directions:

OANDA’s Open Positions Ratio

USD/CAD ratio is showing short positions with a commanding majority (64%), indicative of trader bias towards USD/CAD moving lower.

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 [5]

Currency Analyst at Market Pulse [6]
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.
Kenny Fisher

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