USD/CAD – Canadian dollar subdued on mixed construction numbers

The Canadian dollar has ticked higher in the Monday session. Early in North American trade, USD/CAD is trading at 1.3335, up 0.10% on the day. On the release front, Canadian construction numbers were mixed. Housing starts climbed to 216 thousand, marking a 5-month high. Building permits declined 0.2%, its weakest reading since June. In the U.S., the sole event is JOLTS Job Openings. The indicator is expected to improve to 7.22 million, after the previous release of 7.01 million. The U.S will release a host of inflation indicators this week, starting with the Producer Prices Index on Tuesday.

The spotlight was on job numbers on Friday, with key indicators on both sides of the border. Canada’s economy added a stunning 94.1 thousand jobs, crushing the estimate of 10.5 thousand. The unemployment rate dropped from 5.8% to 5.6%. The strong performance boosted the Canadian dollar on Friday, after losing ground for three straight days.

It was a completely different story in the United States. Nonfarm employment change was weaker than expected, plunging from 250 thousand to 155 thousand. This was well off the forecast of 198 thousand. Wage growth remained stuck at 0.2%, missing the estimate of 0.3%. There was better news from the unemployment rate, which remained at a sizzling 3.7%. The data points to slowing growth in the U.S, which could lead to a change in monetary policy. The Federal Reserve minutes from the November meeting indicated that policymakers discussed changing their stance of gradual increases rate increases. The markets are currently looking at one rate hike next year – just a few months ago, analysts were predicting up to four rate hikes in 2019.

European open – Tough week for UK and markets

Global growth and Brexit fears dominate proceedings

USD/CAD Fundamentals

Monday (December 10)

  • 1:30 BoC Deputy Governor Lane Speaks
  • 8:15 Canadian Housing Starts. Estimate 198K. Actual 216K
  • 8:30 Canadian Building Permits. Estimate -0.2%. Actual -0.2%
  • 10:00 US JOLTS Openings. Estimate 7.22M

Tuesday (December 11)

  • 8:30 US PPI. Estimate 0.0%
  • 8:30 US Core PPI. Estimate 0.1%

*All release times are DST

*Key events are in bold

USD/CAD for Monday, December 10, 2018

USD/CAD, December 10 at 8:50 EST

Open: 1.3322 High: 1.3341 Low: 1.3293 Close: 1.3335

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.3099 1.3198 1.3292 1.3382 1.3461 1.3552

In the Asian session, USD/CAD ticked higher but then retracted. The pair posted small gains in European trade and has posted further gains early in the North American session

  • 1.3292 is providing support
  • 1.3382 is the next resistance line
  • Current range: 1.3292 to 1.3382

Further levels in both directions:

  • Below: 1.3292, 1.3198 and 1.3099
  • Above: 1.3382, 1.3461, 1.3552 and 1.3696

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

Market Analyst at OANDA
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, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.