USD/CAD calm on light data calendar

USD/CAD is drifting for a second successive day. In the North American session, the pair is trading at 1.3131, up 0.11% on the day.

US jobless claims sparkle

The weekly US Initial Jobless Claims report had an excellent week, with a gain of 787 thousand. This crushed the estimate of 860 thousand and was the lowest figure since mid-March, prior to the spread of Covid-19, which led to skyrocketing unemployment numbers. However, the positive news was tempered by the Conference Board Leading Economic Index, which slowed to 0.7% in September. The reading missed the consensus of 0.8%. The weakening pace of improvement is a sign that US recovery could be losing steam in the fourth quarter. The index posted a 1.4% increase in August and a 2.o percent gain in July. The Canadian dollar has shown a muted response to the mixed data on Thursday.

 

Deadlock over US stimulus deal

The financial markets continue to react to the on-again-off-again fiscal stimulus talks between the Republicans and Democrats. Nancy Pelosi and Treasury Secretary Steven Mnuchin have been holding talks, but the prospect of a deal between the Democrats and Republicans are dimming. Even if a deal was reached tomorrow, the stimulus package would not be implemented until after the election. A stimulus agreement would be good news for President Trump, but Republicans senators have their own election campaigns to worry about, and a massive spending package will not win many votes among conservative voters. It appears that barring a change in stance by Republican senators, the fiscal package is unlikely to materialize. A no-deal scenario is bullish for the US dollar, as risk sentiment would likely drop if there is no agreement.

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USD/CAD Technical

  • We find support at 1.3089. This is followed by support at 1.3047
  • 1.3188 is the next resistance line. Above, there is resistance at 1.3245
  • USD/CAD broke below the 10-day MA on Tuesday, which is a sign of a downward trend

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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