USD/CAD – Canadian dollar steady, focus on manufacturing PMIs

USD/CAD has posted small gains in the Wednesday session. Currently, the pair is trading at 1.3657, up 0.13% on the day. On the release front, there are no major events. The U.S. and Canada will both release manufacturing PMIs, which gauge the strength of the manufacturing sector. On Wednesday, the U.S. will release ADP nonfarm payrolls and unemployment claims.

The Canadian dollar remains under pressure, posting weekly losses for six straight weeks. The wobbly currency even lost ground during a quiet Christmas week. USD/CAD has jumped 3.7% since mid-November, as turmoil in the equity markets has soured risk appetite and made minor currencies like the Canadian dollar less attractive. The volatility in U.S. markets was especially pronounced last week, as stocks plunged but then rebounded. There is widespread concern that the global trade war will continue to take a bite out of the global economy, which could mean more headwinds for the Canadian dollar, a commodity currency.

Another factor hurting the Canadian dollar, which is sensitive to commodity prices, is the sharp drop in oil prices. WTI crude, which is currently selling at $44 a barrel, has plunged 39% in just three months. Weaker economic conditions worldwide could mean that oil prices will remain depressed in the coming months.

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USD/CAD Fundamentals

Wednesday (January 2)

  • 9:30 Canadian Manufacturing PMI
  • 9:45 US Final Manufacturing PMI. Estimate 53.9

Thursday (January 3)

  • 7:30 US Challenger Job Cuts
  • 8:15 US ADP Non-Farm Employment Change. Estimate 179K
  • 8:30 US Unemployment Claims. Estimate 220K
  • 10:00 US ISM Manufacturing PMI. Estimate 57.7

*All release times are EST

*Key events are in bold

USD/CAD for Wednesday, January 2, 2019

USD/CAD, January 2 at 9:25 EST

Open: 1.3640 High: 1.3663 Low: 1.3570 Close: 1.3657

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.3383 1.3561 1.3552 1.3696 1.3793 1.4001

USD/CAD posted small losses in the Asian session but then recovered. In European trade, the pair dropped sharply but then reversed directions and recovered most of the losses. USD/CAD is steady in North American trade

  • 1.3552 is providing support
  • 1.3696 is the next resistance line
  • Current range: 1.3552 to 1.3696

Further levels in both directions:

  • Below: 1.3552, 1.3461, 1.3383 and 1.3292
  • Above: 1.3696, 1.3793 and 1.4001

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.