USD/CAD has posted slight gains on Tuesday, as the pair trades at 1.3930 in the European session. In economic news, there are three US releases on Tuesday, highlighted by CB Consumer Confidence. The markets are expecting this key indicator to climb to 93.9 points. There are no Canadian events scheduled for this week.
It’s been a December to forget for the Canadian dollar, which has plunged almost 600 points against the mighty US dollar. USD/CAD is trading close to 11-year lows, as the pair trades within striking distance of the symbolic 1.40 line. Recent key data has not looked good. 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%. 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 . This situation has hurt the Canadian dollar, which continues to slide, having lost close to 100 points already this week. Will the Canadian dollar strike the 1.40 level before the New Year?
Consumer confidence indicators are closely monitored by analysts, as stronger consumer confidence often translates into increased consumer spending, a key driver of economic growth. The news has been positive on this front, as UoM Consumer Sentiment improved to 92.6 points, above the forecast of 92.1 points and marking a 4-month high. The markets are counting on another solid reading from CB Consumer Confidence, which is expected to improve to 93.9 points. Strong consumer demand has been an important factor in the strength of the US economy, which led to the historic rate hike by the Federal Reserve last week.
Tuesday (Dec. 29)
- 13:30 US Goods Trade Balance. Estimate -60.9B
- 14:00 US S&P/CS Composite-20 HPI. Estimate 5.6%
- 15:00 US CB Consumer Confidence. Estimate 93.9 points
USD/CAD for Tuesday, December 29, 2015
USD/CAD December 29 at 12:15 GMT
USD/CAD 1.3936 H: 1.3887 L: 1.3863
- USD/CAD was flat in the Asian session and has posted gains in European trade.
- 1.3865 is providing support.
- There is resistance at the round number of 1.40.
- Current range: 1.3865 to 1.40
Further levels in both directions:
- Below: 1.3865, 1.3757, 1.364o and 1,3555
- Above: 1.40, 1.4165 and 1.4310
OANDA’s Open Positions Ratio
USD/CAD ratio is unchanged, as short positions have a commanding majority (65%), 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