USD/CAD – Wobbly Canadian dollar back above 1.36. U.S jobless claims within expectations

USD/CAD has gained ground in the Thursday session. Currently, the pair is trading at 1.3639, up 0.46% on the day. On the release front, U.S. unemployment claims rose slightly to 216 thousand, just shy of the estimate of 217 thousand. We’ll also get a look at CB Consumer Confidence, which is forecast to climb to 135.7 points. On Friday, the U.S. publishes Chicago PMI and Pending Home Sales. There are no Canadian releases this week, so U.S. indicators will have a magnified effect on the direction of USD/CAD.

The struggling Canadian dollar has dropped to its lowest level since May 2017. There has been little to cheer about in December, with the currency dropping 2.6 percent this month. In the U.S., the stock markets have been in turmoil, with massive losses on Monday, followed by sharp gains on Thursday. The roller-coaster movement in the markets has raised risk apprehension, making the Canadian currency less attractive, as nervous investors stick with safe-haven assets.

There was a positive development in the U.S- China trade war, following reports on Wednesday that a U.S. delegation would travel to China to hold talks in the first week of January. The ongoing trade dispute between the world’s two largest economies has caused havoc in the equity markets and hurt commodity currencies like the Canadian dollar. President Trump has agreed to suspend further tariffs on China while the sides are talking, but has promised more tariffs on March 1 if the sides are unable to reach a deal. A breakthrough might be to tall an order, but the fact that the sides are meeting face-to-face for the first time in months will likely improve the mood of jittery investors.

USD/CAD Fundamentals

Thursday (December 27)

  • 8:30 US Unemployment Claims. Estimate 217K. Actual 216K
  • 9:00 US HPI. Estimate 0.3%. Actual 
  • 10:00 US CB Consumer Confidence. Estimate 133.7

Friday (December 28)

  • 9:45 US Chicago PMI. Estimate 61.4
  • 10:00 US Pending Home Sales. Estimate 0.9%

*All release times are EST

*Key events are in bold

USD/CAD for Thursday, December 27, 2018

USD/CAD, December 27 at 10:00 EST

Open: 1.3574 High: 1.3639 Low: 1.3566 Close: 1.3636

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.3383 1.3561 1.3552 1.3696 1.3793 1.4001

USD/CAD posted small gains in the Asian session. The pair recorded stronger gains in the European session but then gave up some of these gains. USD/CAD has resumed the upward movement in North American trade

  • 1.3552 is providing support
  • 1.3696 is the next resistance line
  • Current range: 1.3552 to 1.3696

Further levels in both directions:

  • Below:1.3552,  1.3461, 1.3383 and 1.3292
  • Above: 1.3696, 1.3793 and 1.4001

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

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental and macroeconomic analysis, Kenny Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in major online financial publications including, Seeking Alpha and FXStreet. Kenny has been a MarketPulse contributor since 2012.