The Canadian dollar has posted further gains on Wednesday, as USD/CAD trades in the mid-1.11 range in the North American session. The Canadian dollar has enjoyed a strong week, gaining about 100 points against its US counterpart. On the release front, Canadian inflation numbers disappointed, as the Raw Materials Price Index posted a decline of 1.8% last month. In the US, the markets are keeping an eye on the FOMC policy meeting, which ends later in the day. The Fed will issue a policy statement and is widely expected to wind up its QE program.
The Canadian shrugged off weak inflation data on Wednesday. The Raw Materials Price Index dropped 1.8%, its third straight decline. The indicator fell short of the forecast of -0.8%. The Industrial Product Price Index followed suit, coming in at -0.4%, coming in shy of the estimate of 0.0%. Like its southern neighbor, Canada has not been able to shake off low inflation levels, which point to ongoing slack in the economy.
In the US, durable goods looked dismal in September. Core Durable Goods Orders dropped 0.2%, its second decline in three months. This was well short of the estimate of 0.5%. Durable Goods Orders followed suit with a decline of -1.3%. This was the indicator’s second straight decline and missed the estimate of 0.4%. Later in the day, the US releases CB Consumer Confidence, with the markets anticipating a strong September reading.
The Federal Reserve will be at center stage on Wednesday, as a two-day meeting wraps up with the release of a monthly policy statement. The Fed is expected to wind up QE, and if policymakers delay this move, the dollar will likely take a hit against its major rivals. The markets will also be looking for hints regarding the timing of a rate hike, which is expected sometime in 2015. Traders should treat the Fed policy statement as a market-mover which could have a significant impact on the currency markets.
USD/CAD for Wednesday, October 29, 2014
USD/CAD October 29 at 15:25 GMT
USD/CAD 1.1141 H: 1.1172 L: 1.1122
USD/CAD Technical
S3
S2
S1
R1
R2
R3
1.0961
1.1004
1.1124
1.1278
1.1414
1.1493
USD/CAD was flat in the Asian session. The pair posted gains in European trade, testing support at 1.124. USD/CAD is stable in the North American session.
1.1124 is an immediate support level.
On the upside, 1.1278 has strengthened as the Canadian dollar continues to gain ground.
Current range: 1.1124 to 1.1278
Further levels in both directions:
Below: 1.1124, 1.1004, 1.0961 and 1.0865
Above: 1.1278, 1.1414, 1.1493 and 1.1669
OANDA’s Open Positions Ratio
USD/CAD ratio is pointing to gains on Wednesday. This is not consistent with the movement of the pair, as the Canadian dollar has posted gains. The ratio has a majority of short positions, indicating trader bias towards the Canadian dollar continuing to move to higher ground.
USD/CAD Fundamentals
12:30 Canadian Raw Materials Price Index. Estimate -0.8%. Actual -1.8%.
12:30 Canadian Industrial Product Price Index. Estimate 0.0%. Actual -0.4%.
18:00 US FOMC Statement.
18:00 US Federal Funds Rate. Estimate <0.25%.
* Key releases are in highlighted bold.
*All release times are GMT
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.
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