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USD/CAD – Loonie Flirts with 1.33, Canadian Housing Report Dips

The Canadian dollar continues to struggle, as the pair briefly rose above the 1.33 line on Thursday. In the North American session, USD/CAD is trading at 1.3250. On the release front, Canadian NHPI, an important housing report, dipped to 0.2%, shy of the forecast of 0.3%. In the US, unemployment claims had another excellent outing, dropping to 246 thousand. On Friday, we could see some movement on the currency markets, as the US releases inflation, retail sales and consumer confidence numbers.

US unemployment claims continue to sparkle, pointing to red-hot US labor market. The key indicator dropped to 246 thousand last week, down slightly from 249 thousand a week earlier. The estimate stood at 252 thousand, marking a tenth consecutive week that the indicator has beaten the forecast. Strong job numbers is one of the main arguments of proponents of a rate hike in December, as the labor market, which is close to capacity, continues to fuel steady economic growth.

On Wednesday, the Federal Reserve released the minutes of its last policy meeting. The minutes contained no dramatic news, but point to deep divisions in the FOMC over monetary policy. This was already apparent in the September rate vote, when three members voted against the decision to maintain rates at 0.25 percent. The minutes indicated that some of the members who voted to hold rates chose to fall in line with Janet Yellen, but are in favor of raising rates “relatively soon”. This means that Yellen will face a tough battle if she wants to hold off a rate in December, given that there is significant support for rate hike in December. The markets have priced in a December hike at 66 percent and the positive sentiment could help the US dollar continue to move higher. The Fed will next meet in November, but analysts don’t expect a move just a week before the presidential election.

USD/CAD Fundamentals

Thursday (October 13)

Friday (October 14)

*All release times are EDT

*Key events are in bold

USD/CAD for Thursday, October 13, 2016

USD/CAD October 13 at 9:45 GMT

Open: 1.3277 High: 1.3307 Low: 1.3235 Close: 1.3250

USD/CAD Technical

S1 S2 S1 R1 R2 R3
1.2922 1.3028 1.3120 1.3253 1.3371 1.3457

Further levels in both directions:

OANDA’s Open Positions Ratio

USD/CAD ratio is showing short positions with a strong majority (60%), indicative of trader bias towards USD/CAD reversing directions and 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 [4]

Market Analyst at OANDA [5]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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