USD/CAD flat despite strong Canadian data

The Canadian dollar’s mini-rally has taken a pause on Thursday. In the North American session, the pair is trading at 1.3306, down 0.11% on the day. After a quiet start to the week, USD/CAD dropped by o.50% on Wednesday, its sharpest one-day fall since early September.

Canada Manufacturing PMI accelerates

Canada’s manufacturing sector continues to recover after a difficult second quarter. The Manufacturing PMI accelerated for a fifth successive month in September, with a reading of 56.0 points, well into expansionary territory. The PMI has steadily rebounded since a poor reading of 33.0 in May, which indicated a sharp contraction. A strong manufacturing sector is critical in order for the economic recovery to gain traction. There was more positive economic data on Thursday, as Building Permits rebounded in August with a gain of 1.7%. This follows a reading of -3.0% in the previous reading.

Canada’s economy grows for a third consecutive month in July, with a gain of 3.0%. This figure was just above the forecast of 3.0%, and the positive reading propelled the Canadian dollar higher on Wednesday.

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USD/CAD Technical

 

  • 1.3391 is the next resistance line. This is followed by resistance at 1.3464
  • 1.3272 is a weak support level. Below, there is support at 1.3228
  • USD/CAD broke below the 10-day MA line on Wednesday, which indicates a downward trend for the pair

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.
Kenny Fisher

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