USD/CAD – Little Change as US, Canadian Key Data Disappoints

The Canadian dollar is unchanged on Wednesday, as USD/CAD trades quietly in the mid-1.16 range. The markets are keeping a close eye on the Federal Reserve, which will release a policy statement later in the day. On the release front, data on both sides of the border was a disappointment. Canadian Wholesale Sales posted a weak gain of 0.1%, well off expectations. In the US, CPI disappointed, posting a decline of 0.3%. Core CPI posted a small gain of 0.1%.

Canadian Wholesales Sales was unexpectedly weak in October, as the key indicator slipped to 0.1%, compared to a strong gain of 1.8% a month earlier. The estimate stood at 0.9%. On Tuesday, Canadian Manufacturing Sales declined by 0.6%, compared to a gain of 2.1% in the previous release. Despite these poor key releases, the Canadian dollar has managed to hold its own against its US counterpart.

Over in the US, inflation indicators continue to look very weak. CPI, the primary gauge of consumer inflation, dropped 0.3%, below the estimate of -0.1%. This was the indicator’s weakest reading in over a year. Core CPI posted a weak gain of 0.1%, matching the forecast. Earlier in the week, Building Permits dropped to 1.04 million, short of the estimate of 1.06 million. Housing Starts rose slightly to 1.04 million, shy of the estimate of 1.06 million. The Manufacturing PMI dipped to 53.7 points, well off the forecast of 56.1 points. This was the indicator’s worst showing since January.

USD/CAD for Wednesday, December 17, 2014

USD/CAD December 17 at 15:00 GMT

USD/CAD 1.1642 H: 1.1660 L: 1.1623

USD/CAD Technical

S3

S2

S1

R1

R2

R3

1.1278

1.1414

1.1493

1.1669

1.1723

1.1875

USD/CAD edged lower in the Asian session. The pair gave up these gains in the European session, and is steady in North American trade.

1.1493 continues to provide strong support.

On the upside, 1.1669 remains under strong pressure. Will the pair break through this line? 1.1723 is next.

Current range: 1.1493 to 1.1669

Further levels in both directions:

Below: 1.1493, 1.1414, 1.1278, 1.1124 and 1.1004

Above: 1.1669, 1.1723, 1.1875 and 1.1975

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in long positions on Wednesday, reversing the direction seen a day earlier. This is not consistent with the movement of the pair, as the Canadian dollar is unchanged on the day. The ratio has a majority of short positions, indicative of trader bias towards USD/CAD moving to lower ground.

USD/CAD Fundamentals

13:30 Canadian Wholesale Sales. Estimate 0.9%. Actual 0.1%.

13:30 US CPI. Estimate -0.1%. Actual -0.3%.

13:30 US Core CPI. Estimate 0.1%. Actual 0.1%.

13:30 US Current Account. Estimate -98B. Actual 100B.

15:30 US Crude Oil Inventories. Estimate -2.6M.

19:00 US FOMC Economic Projections.

19:00 US FOMC Statement.

19:00 US Federal Funds Rate. Estimate <0.25%.

19:30 US FOMC Press Conference.

*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.