USD/CAD – Canadian Dollar Unchanged as Investors Search for Cues

The Canadian dollar has ticked higher in the Monday session. Currently, the pair is trading at 1.2587, up 0.06% on the day. On the release front, there are no Canadian indicators on the schedule. In the US, the sole indicator is the federal budget balance, which is expected to rebound and show a large surplus of $50.2 billion. This would mark the first surplus since September.

Last week’s market selloff boosted the US dollar, at the expense of the Canadian dollar and most other major currencies. The Canadian dollar dropped 1.2% last week, and is down 2.2% in February, erasing the gains we saw in January. Interestingly, the catalyst for the current turbulence has been solid economic data in the US, namely, improved payrolls and wage growth reports. Is the correction over? It’s too early too tell, since much of the sell-off is related to investor concerns over possible interest rate hikes by major central banks. The Bank of England has said it could accelerate its pace of hikes, and the Federal Reserve could follow suit if inflation moves higher.

Canadian employment growth has impressed in recent months, but the trend reversed sharply in January. Employment Change plunged by 88.0 thousand, well off the estimate of +10.3 thousand. The unemployment rate climbed from 5.7% to 5.9%, missing the estimate of 5.8%. The Canadian dollar reacted on Friday with losses, but managed to recover and ended the Friday session almost unchanged.

 

USD/CAD Fundamentals

Monday (February 12)

  • 14:00 US Federal Budget Balance. Estimate 50.2B

*All release times are GMT

*Key events are in bold

USD/CAD for Monday, February 12, 2018

USD/CAD, February 12 at 10:05 EST

Open: 1.2580 High: 1.2606 Low: 1.2556 Close: 1.2587

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2190 1.2351 1.2494 1.2630 1.2757 1.2855

USD/CAD has showed little movement in the Asian and European sessions

  • 1.2494 is providing support
  • 1.2630 is a weak resistance line
  • Current range: 1.2494 to 1.2630

Further levels in both directions:

  • Below: 1.2494, 1.2351, 1.2190 and 1.2060
  • Above: 1.2630, 1.2757 and 1.2855

OANDA’s Open Positions Ratio

USD/CAD ratio is almost unchanged in the Monday session. Currently, long positions have a majority (51%), indicative of a lack of trader bias towards as to what direction USD/CAD takes next.

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.