USD/CAD – Canadian Dollar Slide Continues as US T-Bills Shine

The Canadian dollar has continued its losing ways in the Wednesday session. Currently, USD/CAD is trading at  1.2889, up 0.44% on the day. The Canadian dollar has slipped 1.0%.percent this week, as USD/CAD has the 1.29 level in its sights. In economic news, BoC Governor Stephen Poloz will testify before the Standing Senate Committee on Banking. There are no key events in the US. On Thursday, the US releases durable goods orders and unemployment claims.

The US dollar continues to climb this week, buoyed by rising yields on US bonds, which have hit 4-year highs. On Wednesday, 10-year US Treasury notes have risen to 3.015%, and 2-year bonds have increased to 2.504 percent. With inflation appearing to be on the rise, there are stronger expectations that the Federal Reserve will raise rates four times in 2018, which is good news for the US dollar. With oil pushing above $70 a barrel, there are concerns that inflation will rise, which has pushed bond prices lower and yields upwards. The US currency has also benefitted from a reduction in geopolitical risk, with an easing of tensions between North and South Korea, and a lull in the conflict in Syria.

The trade battle between China and the US has become a geopolitical hotspot, dominating the headlines and shaking global markets. After a series of tit-for-tat tariffs between the economic giants, there has been widespread concern that these moves could lead to a trade war which would slow down Chinese growth and trigger a global recession. However, the bellicose rhetoric between the sides has eased and US Treasury Secretary Steven Mnuchin is scheduled to lead a delegation to Beijing. On Tuesday, President Trump said that “we’ve got a very good chance at making a deal.”

Dollar Yields to Higher Rates

USD/CAD Fundamentals

 Wednesday (April 25)

  • 10:30 US Crude Oil Inventories. Estimate -1.6M
  • 16:15 BoC Gov Poloz Speaks

Thursday (April 26)

  • 8:30 US Core Durable Goods Orders. Estimate 0.5%
  • 8:30 US Durable Goods Orders. Estimate 1.6%
  • 8:30 US Unemployment Claims. Estimate 230K

*All release times are DST

*Key events are in bold

 

USD/CAD for Wednesday, April 25, 2018

USD/CAD, April 25 at 8:00 DST

Open: 1.2833 High: 1.2890 Low: 1.2821 Close: 1.2889

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2687 1.2757 1.2850 1.2943 1.3015 1.3125

USD/CAD continues to break through resistance lines. The pair inched higher in the Asian session and has recorded additional gains in European trade

  • 1.2850 has switched to a support role following gains by USD/CAD on Wednesday
  • 1.2943 is the next resistance line
  • Current range: 1.2850 to 1.2943

Further levels in both directions:

  • Below: 1.2850, 1.2757, 1.2687 and 1.2590
  • Above: 1.2943, 1.3015 and 1.3125

OANDA’s Open Positions Ratio

USD/CAD ratio is showing little movement in the Wednesday session. Currently, long and short positions are almost evenly split, indicative of a lack of trader bias 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.