USD/CAD – Canadian dollar lower, manufacturing sales dips

The Canadian dollar has edged lower in the Wednesday session. Currently, USD/CAD is trading at 1.2974, up 0.31% on the day. On the release front, there were key indicators on both sides of the border. Canadian Manufacturing Sales declined by 0.4%, better than the estimate of -0.6%. In the U.S, construction indicators missed the estimates. Building Permits ticked up to 1.24 million, shy of the estimate of 1.27 million. Housing Starts slipped to 1.20 million, missing the forecast of 1.22 million. Later in the day, the Federal Reserve releases the minutes of its September policy meeting. On Thursday, the U.S publishes Philly Fed Manufacturing Index and unemployment claims, and Canada will publish ADP Nonfarm Employment Change.

The Canadian dollar gained ground early this week. The currency received a boost from an optimistic Bank of Canada business survey on Monday. The poll found that businesses expect higher sales for both domestic and foreign customers. Companies are reporting increased investment and hiring, and the mood is optimistic in the business sector. Investors are keeping an eye on the BoC, which set the benchmark rate next week. The markets are widely expecting the BoC to raise rates by a quarter-point, which would match the Fed rate hike in September.

U.S indicators were a mixed bag on Monday, as retail sales were soft but manufacturing data was solid. Retail Sales posted a meager gain of 0.1%, shy of the estimate of 0.4%. Core Retail Sales surprised with a decline of 0.1%, compared to an estimate of 0.4%. This marked the first decline since June 2017. There was better news from the manufacturing front, as Empire State Manufacturing Index strengthened to 21.1, above the estimate of 20.4 points.

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USD/CAD Fundamentals

Wednesday (October 17)

  • 8:30 Canadian Manufacturing Sales. Estimate -0.6%. Actual -04%
  • 8:30 US Building Permits. Estimate 1.27M. Actual 1.24M
  • 8:30 US Housing Starts. Estimate 1.20M. Actual 1.22M
  • 10:30 US Crude Oil Inventories
  • 12:10 US FOMC Member Lael Brainard Speaks
  • 14:00 US Treasury Currency Report

Thursday (October 18)

  • 8:30 Canadian ADP Nonfarm Employment Change
  • 8:30 US Philly Fed Manufacturing Index. Estimate 19.7
  • 8:30 US Unemployment Claims. Estimate 211K

*All release times are DST

*Key events are in bold

USD/CAD for Wednesday, October 17, 2018

USD/CAD, October 17 at 8:00 DST

Open: 1.2934 High: 1.2975 Low: 1.2933 Close: 1.2974

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2733 12831 1.2970 1.3067 1.3198 1.3292

USD/CAD ticked lower in the Asian session. In European trade, the pair posted small losses but has reversed directions and moved higher

  • 1.2970 was tested earlier in support. It remains fluid
  • 1.3067 is the next resistance line
  • Current range: 1.2970 to 1.3067

Further levels in both directions:

  • Below: 1.2970, 1.2831, 1.2733 and 1.2649
  • Above: 1.3067, 1.3198 and 1.3292

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.