USD/CAD continues to range-trade

USD/CAD is almost unchanged for a second straight day. In Tuesday’s North American session, the pair is trading at 1.3184, down 0.06% on the day. In the US, construction releases were positive in September. Housing Starts were up 1.9%, while Building Permits climbed 5.2%.

Investors eye Canadian inflation, retail sales

It has been a quiet start to the week for the Canadian dollar, but that could change on Wednesday, as Canada releases key inflation and consumer spending data. Consumer inflation remains worryingly low, a sign of weak economic activity. In September, CPI came in at -0.1% for a second straight month. Analysts are expecting much better news from retail sales, which is projected to show a gain of 1.1% in August, after an identical gain a month earlier. If the inflation and retail sales numbers miss expectations, USD/CAD could respond with volatility.

BoC says recovery will be bumpy

The Bank of Canada released its quarterly Business Outlook report on Monday. The report is useful to gauge the mood of the business sector. The outlook is often a market-mover of the Canadian dollar, but the USD/CAD response to the report was muted. The report noted that there are indications that “the pace of the recovery will slow and be uneven across industries”. This is another sign that Canada’s economic recovery is tenuous, which could mean bumps in the road for the Canadian dollar.

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USD/CAD Technical

  • We find support at 1.3162. Below, there is support at 1.3135
  • 1.3205 is a weak resistance line. Close by, there is resistance at 1.3220
  • USD/CAD continues to put pressure on the 10-day MA line. If the pair breaks below this line, it would indicate 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.