USD/CAD – Modest Gains As Market Eyes Fed Minutes

The Canadian dollar has posted modest losses on Wednesday, as USD/CAD trades in the low-1.09 range in the North American session.  In the US, the Federal Reserve releases its policy meeting minutes, and Fed chair Janet Yellen speaks at a university commencement in New York. There are no Canadian releases on Wednesday.

All eyes will be on the Federal Reserve on Wednesday, with the release of the minutes of the most recent policy meeting. The Fed has been steadily trimming its asset purchase program since December, and is expected to wind up the program before the end of 2014, provided that the economy does not take a downward spin. Since 2008, the benchmark interest rate has been close to zero, and no increases are expected before mid-2015. The pace of future increases will likely be slow to allow for a smooth adjustment from the economy and the financial markets.

In the US, key indicators have been generally strong, and last week ended with encouraging housing numbers. Building Permits jumped to 1.08 million, well above the estimate of 1.01 million. This was the highest level we’ve seen since December 2006. Housing Starts continues to move higher and climbed to 1.07M, compared to the estimate of 0.98M. This marked a five-month high. Meanwhile, UoM Consumer Sentiment dipped to 81.8 points, short of the estimate of 84.7 points.

USD/CAD for Wednesday, May 21, 2014

USD/CAD May 21 at 14:50 GMT

USD/CAD 1.0933 H: 1.0942 L: 1.0928

USD/CAD Technical

• USD/CAD has posted slight gains on Wednesday.
• 1.0906 has reverted to a support role as the Canadian dollar continues to lose ground.
• On the upside, 1.1000 is the next line of resistance. This is followed by resistance at 1.1094.
• Current range: 1.0906 to 1.1000

Further levels in both directions:

• Below: 1.0906, 1.0852, 1.0775, 1.0706, 1.0678
• Above: 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 Wednesday trading. This is not consistent with what we are seeing from the pair, as the US dollar has moved higher. The ratio has a majority of long positions, indicative of trader bias in favor of the US dollar continuing to post gains.

USD/CAD continues to trade above the 1.09 line. The Canadian dollar is under pressure in the North American session.

USD/CAD Fundamentals

• 14:00 US FOMC Member William Dudley Speaks.
• 14:30 US Crude Oil Inventories. Estimate -0.1M. Actual -7.2M.
• 15:30 US Federal Reserve Chair Janet Yellen Speaks.
• 17:30 US FOMC Member Narayana Kocherlakota Speaks.
• 18:00 US FOMC Meeting Minutes.

*Key releases are highlighted in bold

*All release times are GMT

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.