USD/CAD dips despite strong housing data

USD/CAD has posted gains in Thursday trade. In the North American session, the pair is trading at 1.3564, up 0.38% on the day. On the release front, Canada Housing Starts improved to 212 thousand, above expectations. In the US, jobless claims fell for a 13th straight week, to 1.31 million. On Friday, Canada will release key employment data and the US publishes PPI data, so it could be a busy end of the week for USD/CAD.

Canada housing climbs above 200K

There was good news from the construction sector in June. Housing starts jumped to 212 thousand, up nicely from 193 thousand. This easily beat the forecast of 185 thousand. This marked the first read above the 200-thousand threshold in four months. However, the Canadian dollar was unable to take advantage of the release and has posted losses on Thursday.

US jobless claims drop, beat forecast

US unemployment claims continue to fall, albeit at a slow rate. Claims fell for a 13th consecutive week on Thursday, but the employment situation in the US remains grim. On Thursday, claims fell to 1.31 million, down from 1.42 million beforehand. This figure easily beat the estimate of 1.37 million. Still, the overall employment picture remains grim. The total number of people claiming benefits rose to 32.9 million, up 1.4 million from the previous week. The unemployment rate is officially listed as 11.1%, but the actual rate is likely closer to 20%.

USD/CAD Fundamentals

Thursday (July 10)

• 8:15 Canada Housing Starts. Estimate 185K. Actual 213K
• 8:30 US Unemployment Claims. Estimate 1375K. Actual 1314K
• 10:00 US Final Wholesale Inventories. Estimate -1.2%. Actual -1.2%
• 10:30 US Natural Gas. Estimate 60B. Actual 56B
• 13:01 US 30-year Bond Auction

Friday (July 10)

• 8:30 Canada Employment Change. Estimate 550.0K
• 8:30 Canada Unemployment Rate. Estimate 12.5%
• 8:30 US PPI. Estimate 0.1%
• 8:30 US Core PPI. Estimate 0.4%

*All release times are EDT

*Key events are in bold

USD/CAD Technical

USD/CAD showed limited movement in the Asian and European sessions. The pair has gained strength in North American trade and posted moderate gains.

• USD/CAD has been unable to push higher than 1.3699, which it reached at the end of June. This could be a sign of consolidation by the pair. If the pair can push above this line, it will put strong pressure on the next resistance level at 1.3716
• The 200-day average remains close to the pair, which could signal that a breakout is near

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