USD/CAD – Canadian Dollar Yawns After US Thanksgiving Break

The Canadian dollar is almost unchanged on Friday, continuing the lack of movement which marked the Thursday session. Currently, USD/CAD is trading slightly below the 1.35 line. There are no Canadian events on the schedule. In the US, there are three minor events, including Goods Trade Balance.

The Federal Reserve is poised to raise interest rates by a quarter-point in December, with the odds of a rate hike at 93 percent. The Fed minutes were released on Thursday, indicating that policymakers felt it appropriate to raise rates “relatively soon”. Fed chair Janet Yellen used the same phrase in her testimony before a congressional committee last week. Some members argued that the Fed needs to raise rates in December in order to preserve the bank’s credibility – despite some broad hints of rate hikes during 2016, the Fed has stayed on the sidelines throughout 2016, causing significant disappointment and frustration in the markets.

The US economy continues to post strong data and on Wednesday it was the turn of durable goods reports. Core Durable Goods Orders rose 1.0%, well above the estimate of 0.2%. Durable Goods Orders surged 4.8%, crushing the estimate of 1.2%. These strong numbers point to a welcome improvement in business investment, and strong consumer fundamentals could see business spending numbers continue to improve. There was also positive news on the consumer front, as the UoM Consumer Sentiment index climbed to 93.8, above the forecast of 91.6.

USD/CAD Fundamentals

Friday (November 25)

• 8:30 US Goods Trade Balance. Estimate -59.2B
• 8:30 US Preliminary Wholesale Inventories. Estimate 0.3%
• 9:45 US Flash Services PMI. Estimate 54.9

*All release times are EST

*Key events are in bold

USD/CAD for Friday, November 25, 2016

USD/CAD November 25 at 6:30 EST

Open: 1.3491 High: 1.3515 Low: 1.3452 Close: 1.3482

USD/CAD Technical

• USD/CAD has shown limited movement in the Asian and European sessions
• 1.3457 was tested earlier in support and is a weak line
• There is resistance at 1.3551

Further levels in both directions:

• Below: 1.3457, 1.3371, 1.3253 and 1.3120
• Above: 1.3551, 1.3648 and 1.3782
• Current range: 1.3457 to 1.3551

OANDA’s Open Positions Ratio

USD/CAD ratio has remained unchanged all week. In the Friday session, short positions command a strong majority (61%), indicative of trader bias towards USD/CAD breaking out and moving to lower ground.

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