USD/CAD – Canadian Dollar Posts Strong Gains on Mixed US Numbers

The Canadian dollar has posted strong gains on Tuesday, as USD/CAD trades in the high-1.23 range. On the release front, US numbers were mixed. Durable Goods Orders posted a sharp decline of 3.4%. Elsewhere, New Home Sales rose to 481 thousand, and CB Consumer Confidence jumped to 102.9 points.

It was a busy day for US releases. Durable Good reports disappointed, as  Durable Goods Orders plunged 3.4%, marking a 4-month low. There was no relief from Core Durable Goods Orders, which declined by 0.8%, its fifth drop in six readings. The markets had expected gains from both indicators. There was much better news later in the day, as CB Consumer Confidence jumped to 102.9 points, crushing the estimate of 95.3 points. New Home Sales followed suit, rising to 481 thousand, well above the forecast of 452 thousand,

Things have gone from bad to worse for the Canadian currency, which was pummeled mercilessly by the US dollar last week. The pair is currently trading at its highest level since April 2009. The pair took a hit late in the week following an unexpected rate cut by the Bank of Canada. The central bank lowered rates from 1.00% to 0.75%, citing weak inflation and the falling price of oil, which is Canada’s biggest export.

USD/CAD for Tuesday, January 27, 2015

USD/CAD January 27 at 16:00 GMT

USD/CAD 1.2388 H: 1.2501 L: 1.2383

USD/CAD Technical

• USD/CAD was flat in the Asian session. The pair moved higher in the European session, testing resistance at 1.2469 before retracting. The pair has edged lower in North American trade, putting strong pressure on support at 1.2387.
• 1.2469 is an immediate resistance line.
• 1.2387 is under attack and could break during the North American session. 1.2261 is stronger.
• Current range: 1.2387 to 1.2469

Further levels in both directions:

• Below: 1.2387, 1.2261, 1.2190, 1.2096 and 1.1975
• Above: 1.2469, 1.2543, 1.2680 and 1.2761

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in long positions on Tuesday, reversing the movement we saw a day earlier. This is not consistent with the pair’s movement, as the Canadian dollar has recorded strong gains. The ratio has a majority of short positions, indicative of trader bias towards the Canadian dollar continuing to move to higher ground.

USD/CAD Fundamentals

• 13:30 US Core Durable Goods Orders. Estimate +0.6%. Actual -0.8%.
• 13:30 US Durable Goods Orders. Estimate +0.6%. Actual -3.4%.
• 14:00 US S&P/CS Composite-20 HPI. Estimate 4.4%. Actual 4.3%.
• 14:45 US Flash Services PMI. Estimate 53.9 points. Actual 54.0 points.
• 15:00 US CB Consumer Confidence. Estimate 95.3 points. Actual 102.9K,
• 15:00 US New Home Sales. Estimate 452K. Actual 481K.
• 15:00 US Richmond Manufacturing Index. Estimate 6 points.

*Key releases are highlighted in bold

*All release times are GMT

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