USD/CAD – US Dollar Edges Higher as Unemployment Claims Drop

USD/CAD continues to move higher on  Thursday, as Unemployment Claims looked sharp for a third consecutive week. The pair is trading just below the 1.07 line in the North American session. In the US, Unemployment Claims dropped to a two-month low, while GDP posted its sharpest gain since 2010. Canadian releases were a mix, as Building Permits jumped to a three-month high, while Ivey PMI slipped badly in November.

US data looked very sharp on Thursday. Unemployment Claims posted its lowest number in two months, dropping to 298 thousand. This easily beat the estimate of 328 thousand. Meanwhile, Preliminary GDP, released each quarter, shot up to 3.6% in Q3, its sharpest gain in close to four years. The estimate stood at 3.0%. The excellent releases are likely to fuel speculation about when the Fed might step in with QE tapering.

In Canada, Building Permits posted a sharp gain of 7.4%, improving on the gain of just 1.7% last month. This easily beat the estimate of 1.2%. Ivey PMI tumbled to 53.7 points, down from 62.8 in October. The markets had expected a much stronger reading of 59.0 points. The Canadian dollar has not been able to keep pace with the US currency and remains stuck at three-year lows. Earlier in the week, the Bank of Canada kept its benchmark interest rate at 1.00%. With inflation will below the target of 2.0%, we may not see any changes to rates for some time.

USD/CAD for Thursday, December 5, 2013

USD/CAD December 5 at 15:00 GMT

USD/CAD 1.0688 H: 1.0689 L: 1.0652

USD/CAD Technical

• USD/CAD continues to post gains in Thursday trading. The pair touched a high of 1.0699 in the North American session but has edged lower.
• On the upside, the pair is facing resistance at 1.0783. This is followed by a resistance line at 1.0852, which has held firm since November 2009.
• 1.0652 continues to provide support. This is followed by a support line at 1.0573.
• Current range: 1.0652 to 1.0783

Further levels in both directions:

• Below: 1.0652, 1.0573, 1.0502, 1.0442 and 1.0337
• Above 1.0783, 1.0852, 1.0945 and 1.10

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to movement towards long positions in Thursday trading. This is reflected in the current movement of the pair, as the US dollar continues to post gains against the struggling Canadian dollar. A majority of the open positions in the USD/CAD ratio are short, indicating a trader bias towards the Canadian dollar reversing its downward spiral and moving to higher ground.

The Canadian dollar remains under pressure as it trades close to the 1.07 line. With the greenback enjoying some upward momentum, the pair could push into 1.07 territory during the North American session.

USD/CAD Fundamentals

• 13:30 Canadian Building Permits. Exp. 1.2%. Actual 7.4%.
• 13:30 US Preliminary GDP. Estimate 3.0%. Actual 3.6%.
• 13:30 US Unemployment Claims. Estimate 328K. Actual 298K.
• 13:30 US Treasury Secretary Jack Lew Speaks.
• 13:30 US Preliminary GDP Price Index. Estimate 1.9%. Actual 2.0%.
• 15:00 US Factory Orders. Estimate -0.9%. Actual -0.9%.
• 15:30 US Natural Gas Storage. Estimate -141B. Actual -162B.
• 15:00 Canadian Ivey PMI. Estimate 53.7 points. Actual 59.0 points. 

*Key releases are highlighted in bold

*All release times are GMT

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