USD/CAD – Canadian Dollar Dips Under 1.16 on Mixed US Data

The Canadian dollar has posted small gains on Wednesday, as USD/CAD trades in the high-1.15 range in the North American session. On the release front, the US released the final events of 2014, with mixed results. Unemployment Claims was weaker than expected, jumping to 298 thousand last week. Pending Home Sales posted a gain of 0.8%, while Chicago PMI dipped to 58.3 points. There are no Canadian releases until next week.

US releases were a mix on the last day of 2014. Unemployment Claims surprised with a sharp rise, coming in at 298 thousand, compared with 280 thousand in the previous reading. The estimate stood at 287 thousand. On the housing front, Pending Home Sales bounced back from a decline in the previous reading, posting a gain of 0.8% in December. This beat the forecast of 0.6%. The news was not as good from Chicago PMI, which dropped to 58.3 points, its worst showing since June. The reading fell short of the estimate of 60.2 points.

With the US economy showing better numbers as we head into 2015, the US consumer is showing more optimism about the economy. On Tuesday, CB Consumer Confidence rose to 92.6 points, up from 88.8 points a month earlier. Although this missed the estimate of 94.6, this was a solid reading which follows last week’s UoM Consumer Sentiment report. That indicator has been on an upward swing and hit 93.6 points in December, its highest level since February 2007. Consumer confidence numbers are closely watched by analysts, as increased confidence should translate into more spending by consumers, creating more jobs and strengthening economic activity.

USD/CAD for Wednesday, December 31, 2014

USD/CAD December 31 at 15:50 GMT

USD/CAD 1.1593 H: 1.1616 L: 1.1571

USD/CAD Technical

• USD/CAD has been marked by choppy trading on Wednesday. The pair tested support at 1.1580 late in the European session as well as early in North American trade.
• 1.1580 remains under strong pressure. Will USD/CAD break below this level? 1.1493 is stronger.
• On the upside, 1.1669 has strengthened in resistance. 1.1723 is next.
• Current range: 1.1580 to 1.1669

Further levels in both directions:

• Below: 1.1580, 1.1493, 1.1414, 1.1278 and 1.1124
• Above: 1.1669, 1.1723, 1.1875 and 1.1975

OANDA’s Open Positions Ratio

USD/CAD is unchanged on Wednesday. This is consistent with the pair’s movement, as the Canadian dollar has posted small gains on the day. The ratio has a majority of short positions, indicative of trader bias towards the Canadian currency continuing to move to higher ground.

USD/CAD Fundamentals

• 13:30 US Unemployment Claims. Estimate 287K. Actual 298K.
• 14:45 US Chicago PMI. Estimate 60.2 points. Actual 58.3 points.
• 15:00 US Pending Home Sales. Estimate 0.6%. Actual 0.8%.
• 15:30 US Crude Oil Inventories. Estimate 0.2M. Actual -1.8M.
• 17:00 US Natural Gas Storage. Estimate -37B.

*Key releases are highlighted in bold

*All release times are GMT

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