USD/CAD – Strong Gains Despite Solid Canadian Data

USD/CAD has posted gains on Thursday, as the pair is trading at the 1.13 line in the North American session. In Canada, Current Account beat expectations, as the deficit fell to C$ 8.4 billion. US markets are closed for the Thanksgiving holiday, so traders can expect light trading during the North American session. On Friday, we’ll get a look at Canadian GDP, a key event which could affect the movement of USD/CAD.

Canadian Current Account posted a strong reading in Q3, as the deficit narrowed to C$8.4 billion, compared to C$11.9 billion in Q2. This marked the third consecutive drop in the estimate. Earlier in the week, Canadian Core Retail Sales improved to 0.0% in the September release. Although this was shy of the estimate of 0.4%, the indicator snapped a streak of two declines. Canadian Retail Sales was sharp, posting a 0.8% gain. This beat the estimate of 0.6%, and came after two consecutive declines. Retail Sales is the primary gauge of consumer spending, a key engine of economic growth.

The US released a host of key data on Wednesday, but the numbers were weak across-the-board. Unemployment Claims jumped to 313 thousand, its highest level since mid-September. Core Durable Goods Orders declined 0.9%, its third decline in four readings. The estimate stood at 0.5%. New Home Sales fell to a 3-month low, dropping to 458 thousand. This was short of the estimate of 471 thousand. Pending Home Sales was no better, declining by 1.1%, well off the estimate of 0.9%. There was better news from UoM Consumer Sentiment, which posted a fourth straight gain, rising to 88.8 points. However, this was short of the estimate of 90.2 points.

USD/CAD for Thursday, November 27, 2014

USD/CAD November 27 at 15:30 GMT

USD/CAD 1.1316 H: 1.1326 L: 1.1235

USD/CAD Technical

S3

S2

S1

R1

R2

R3

1.1004

1.1124

1.1278

1.1414

1.1493

1.1669

USD/CAD was calm in the Asian session but was marked by choppy trading in European trade. The pair has posted strong gains in the North American session, breaking above resistance at 1.1278.

1.1278 has reverted to a support role. 1.1124 is stronger.

1.1414 is a strong resistance line.

Current range: 1.1278 to 1.1414

Further levels in both directions:

Below: 1.1278, 1.1124, 1.1004, 1.0961 and 1.0886

Above: 1.1414, 1.1493, 1.1669 and 1.1723

OANDA’s Open Positions Ratio

USD/CAD ratio is almost unchanged on Thursday. This is not consistent with the movement of the pair, as the US dollar has posted strong gains. The ratio is showing an even split between long and short positions, indicative of a lack of trader bias as to what direction USD/CAD will take.

USD/CAD Fundamentals

13:30 Canadian Current Account. Estimate -10.3B. Actual -8.4B.

* Key releases are highlighted in 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.