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USD/CAD – Canadian Dollar Edges Higher, Markets Eye US Jobless Claims

The Canadian dollar has posted small gains in the Thursday session. Currently, USD/CAD is trading at 1.3530. It continues to be quiet on the release front, with no Canadian events this week. In the US, today’s highlight is unemployment claims, with the indicator expected to edge up to 277 thousand. The US will also release Crude Oil Inventories, with the markets expecting a decline of 1.3 million.

As the Canadian dollar is a commodity-sensitive currency, any movement in crude oil prices can affect the movement of USD/CAD. Crude prices remain strong, as the recent agreement between OPEC and other oil exporters, which calls for production cuts, is expected to begin on January 1. Under the agreement, production is expected to drop 1.8 million barrels per day. Saudi Arabia, OPEC’s largest producer, has agreed to bear most of the cuts in production. However, even if oil exporters abide by their commitments under the deal, it’s questionable if crude prices will continue to rise, as US shale producers are likely to step in if oil prices move above the $60 level.

With the US economy continuing to expand sharply, US consumers are brimming with confidence, in what analysts are describing as a post-election surge in optimism. Recent consumer confidence surveys are pointing upwards, as the US consumer is optimistic that economic conditions will continue to improve under the incoming Trump administration. The CB Consumer Confidence report surged in December to 113.7, its highest level since August 2001. This reading comes on the heels of UoM Consumer Sentiment, which climbed to a 12-year high, with a reading of 93.8 points. Both of these well-respected surveys found that consumers are confident that continuing economic growth will create new jobs and raise incomes. Trump’s economic platform remains short on details, but he has promised to cut taxes while increasing public spending. If Trump manages to implement both of these goals, the US economy could heat up and also help global growth pick up speed.

USD/CAD Fundamentals

Thursday (December 29)

*All release times are EST

*Key events are in bold

USD/CAD for Thursday, December 29, 2016

USD/CAD December 29 at 7:50 EST

Open: 1.3553 High: 1.3556 Low: 1.3501 Close: 1.3535

USD/CAD Technical

S1 S2 S1 R1 R2 R3
1.3253 1.3371 1.3457 1.3589 1.3759 1.3889

Further levels in both directions:

OANDA’s Open Positions Ratio

USD/CAD ratio is showing movement towards short positions. Currently, long positions have a majority (56%). This is indicative of trader bias towards USD/CAD continuing to move 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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