USD/CAD – Canadian Dollar Unchanged in Holiday-Thinned Trade

The Canadian dollar continues to have an uneventful week. In the Friday session, USD/CAD is trading at 1.2876, down 0.07% on the day. US and Canadian markets are closed for the Easter holiday, so we can expect the pair to have a quiet day.

Canada’s GDP in January was a disappointment. The economy contracted 0.1%, missing the estimate of +0.1%. This marked the first decline since August. There was more disappointing news on the inflation front, as the Raw Materials Price Index declined 0.3%, well below the estimate of a 2.8% gain. In the US, unemployment claims impressed, dropping to 215 thousand. This easily beat the estimate of 230 thousand. Consumer confidence also improved, as UoM Consumer Sentiment rose to 101.4, breaking past the 100-barrier for the first time since October. However, the indicator missed the estimate of 101.9 points.

The US economy continues to show strong expansion. Revised GDP for the third quarter came in at 2.9%, beating the estimate of 2.7%. This reading was revised upwards from the initial GDP estimate of 2.5%. Fourth quarter growth, although solid, could not keep up with a superb third quarter, which posted a gain of 3.2%. As for 2018, first quarter growth is expected to soften to 1.8%, but there is still a strong chance that the economy could hit 3% growth this year, as promised by US President Trump. The catalysts for such a rosy prediction are the massive tax cut and higher government spending. Where does this leave the Federal Reserve, which raised interest rates last week? Currently, the Fed is projecting to more rate hikes this year, but if the economy remains strong and inflation levels move closer to the Fed target of 2%, we could see four rate increases in 2018.

 

USD/CAD Fundamentals

 Friday (March 30)

  • There are no Canadian or US events

*All release times are GMT

*Key events are in bold

 

USD/CAD for Friday, March 30, 2018

USD/CAD, March 30 at 7:50 EST

Open: 1.2896 High: 1.2944 Low: 1.2815 Close: 1.2876

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2687 1.2757 1.2850 1.2930 1.3050 1.3165

USD/CAD was flat in the Asian session. In European trade, the pair edged lower but has recovered

  • 1.2850 was tested earlier in support. It is a weak line
  • 1.2930 is the next resistance line
  • Current range: 1.2850 to 1.2930

Further levels in both directions:

  • Below: 1.2850, 1.2757 and 1.2687
  • Above: 1.2930, 1.3050, 1.3165 and 1.3260

OANDA’s Open Positions Ratio

USD/CAD ratio continues to show little movement this week. Currently, short positions have a majority (55%), indicative of 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

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.