USD/CAD – Loonie Firm As US Manufacturing Numbers Slide

The Canadian dollar has edged upwards on Tuesday, as USD/CAD trades in the mid-1.08 range early in the North American session. On the release front, US Core Durable Goods and Durable Goods softened in April. We’ll get a look at CB Consumer Confidence later in the day. The markets are expecting another strong reading in the April release. In Canada, Corporate Profits posted their sharpest gain in over two years.

The week started on a bright note for Canadian releases, as Corporate Profits jumped 7.4% in Q1, its strongest gain since Q4 of 2011. Meanwhile, Canadian inflation numbers continue to hover at low levels, as CPI and Core CPI both softened in April. CPI dipped to 0.3%, a three-month low. However, this did match the estimate. Core CPI, a key release, edged down to 0.2%, which also matched the estimate. Inflation is indicative of an underperforming economy, and there is little chance of the Bank of Canada increasing rates without higher inflation levels.

US Core Durable Goods Orders, the primary gauge of manufacturing activity, disappointed in April. The indicator slumped to just 0.1%, missing the estimate of 0.2%. This compared to a strong gain of 2.0% last month. Durable Goods Orders dropped to 0.8%, but did beat the estimate of -0.5%.

USD/CAD for Tuesday, May 27, 2014

USD/CAD May 27 at 14:00 GMT

USD/CAD 1.0852 H: 1.0859 L: 1.0836

USD/CAD Technical

• USD/CAD has edged lower on Tuesday.
• On the downside, there is strong pressure on 1.0852. Will the pair break below this line? There is stronger support at 1.0775.
• 1.0906 is the next resistance line. The key line of 1.1000 is stronger.
• Current range: 1.0852 to 1.0906

Further levels in both directions:

• Below: 1.0852, 1.0775, 1.0706, 1.0678
• Above: 1.0906, 1.10, 1.1094, 1.1177 and 1.1319

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in short positions in Tuesday trading, continuing the trend we saw a day earlier. This is consistent with what we are seeing from the pair, as the Canadian dollar has edged higher. The ratio has a majority of long positions, indicative of trader bias in favor of the US dollar breaking out and posting gains.

USD/CAD is showing little activity on Tuesday. The Canadian dollar is unchanged in the North American session.

USD/CAD Fundamentals

• 12:30 Canadian Corporate Profits. Actual 7.4%.
• 12:30 US Core Durable Goods Orders. Estimate 0.2%. Actual 0.1%.
• 12:30 US Durable Goods Orders. Estimate -0.5%. Actual 0.8%.
• 13:00 US S&P/CS Composite-20 HPI. Estimate 11.9%. Actual 12.4%.
• 13:00 US HPI. Estimate 0.5%. Actual 0.7%.
• 13:45 US Flash Services PMI. Estimate 55.6 points. Actual 58.4 points.
• 13:59 US Richmond Manufacturing Index. Estimate 5 points. Actual 7 points.
• 14:00 US CB Consumer Confidence. Estimate 83.2 points.

*Key releases are highlighted in bold

*All release times are GMT

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