USD/CAD – Limited Movement Ahead of Key US Retail Sales

The Canadian dollar has posted slight losses on Wednesday, as USD/CAD trades in the low-1.26 range in the North American session. On the release front, there were no major US releases. Crude Oil Inventories slipped to 4.9 million in January. There are no Canadian releases on Wednesday.

US employment numbers continue to impress, as JOLTS Jobs Openings climbed to 5.05 million, matching expectations. This was the indicator’s highest level since 2001, and points to more available jobs due to an increase in demand for goods and services. The strong reading follows a solid US Nonfarm Payrolls report for January, which was released on Friday. The key employment indicator improved to 257 thousand in January, up from 252 thousand a month earlier. This easily beat the estimate of 236 thousand. The Federal Reserve has been clear that the employment numbers will have to be strong before a rate hike kicks in, so these strong employment releases reinforce expectations for an interest rate in mid-2015, which would be a major boost for the US dollar.

Earlier in the week, Canadian Housing Starts improved to 187 thousand in January, up from 180 thousand a month earlier. This beat the estimate of 184 thousand. Last week ended with strong Canadian numbers. Building Permits, a volatile indicator, jumped 7.7%, easily beating the forecast of 4.8%. On the employment front, Employment Change climbed 35.4 thousand, crushing the estimate of 4.7 thousand. The unemployment rate remained at 6.6%, beating the forecast of 6.7%.

USD/CAD for Wednesday, February 11, 2015

USD/CAD February 11 at 16:15 GMT

USD/CAD 1.2636 H: 1.2696 L: 1.2572

USD/CAD Technical

• USD/CAD was flat in the Asian session. The pair posted gains in the European session. The pair tested resistance at 1.2680 in the North American session, but then retracted.
• 1.2543 has strengthened in support as the pair trades at higher levels.
• 1.2680 is a weak resistance line.
• Current range: 1.2543 to 1.2680

Further levels in both directions:

• Below: 1.2543, 1.2469, 1.2387, 1.2261, 1.2190 and  1.2096
• Above: 1.2680, 1.2761, 1.2950 and 1.3063

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 consistent with the pair’s movement, as the US dollar has posted gains. The ratio has a majority of long positions, indicative of trader bias towards the US dollar continuing to move higher.

USD/CAD Fundamentals

• 15:30 US Crude Oil Inventories. Estimate 3.7M.
• 18:01 US 10-year Bond Auction.
• 19:00 US Federal Budget Balance. Estimate -2.6B.

*Key releases are highlighted in bold

*All release times are GMT

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