USD/CAD – Lack of Canadian events leaves loonie listless

USD/CAD has posted small gains for a second successive day. On Tuesday, the pair is trading at 1.3125, up 0.11% on the day. On the release front, there are no Canadian events for a second straight day. On Wednesday, Canada releases Building Permits and Ivey PMI. In the U.S, the key event is ISM Non-manufacturing PMI, which is expected to dip to 57.2 points. Later on Tuesday, President Trump delivers the State of Union address before Congress.

It’s been a quiet week for the Canadian dollar, after strong gains a week earlier. The absence of Canadian releases has contributed to the lack of movement of the currency. With Canada releasing Ivey PMI on Wednesday and key employment data on Friday, traders should be prepared for stronger movement from USD/CAD. The markets will also be keeping a close eye on the Federal Reserve, as Fed Chair Jerome Powell speaks at an event in Washington. At last week’s monetary policy update, Powell said that the central bank would be “patient” regarding future rate hikes. It was an aggressive 2018 for the Fed, which raised rates four times last year, in response to a hot U.S. economy. However, with a global trade war in full force and U.S. growth slightly lower, the Fed has trimmed its forecast to two interest rates in 2019. Many analysts have gone further, predicting no rate hikes this year.

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USD/CAD Fundamentals

Tuesday (February 5)

  • 10:00 US ISM Non-Manufacturing PMI. Estimate 57.2
  • Tentative – US IBD/TIPP Economic Optimism. Estimate 53.1
  • 21:00 US President Trump State of the Union Address

Wednesday (February 6)

  • 8:30 Canadian Building Permits. Estimate -0.9%
  • 10:00 Canadian Ivey PMI. Estimate 56.4
  • 19:00 Fed Chair Powell Speaks

*All release times are EST

*Key events are in bold

USD/CAD for Tuesday, February 5, 2019

USD/CAD, February 5 at 9:30 EST

Open: 1.3111 High: 1.3131 Low: 1.3102 Close: 1.3125

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2884 1.2955 1.3049 1.3125 1.3200 1.3290

USD/CAD posted small gains in the Asian session and recovered in European trade. The pair is steady in North American trade

  • 1.3049 is providing support
  • 1.3125 was tested earlier in resistance. It is a weak line
  • Current range: 1.3049 to 1.3125

Further levels in both directions:

  • Below: 1.3049, 1.2955 and 1.2844
  • Above: 1.3125, 1.3200, 1.3290 and 1.3383

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.