USD/CAD – Rangebound Close to 1.09

The Canadian dollar is listless at the start of the new trading week, as USD/CAD trades in the high-1.08 range in Monday’s North American session. On Friday, both the US and Canada posted weak employment data. It’s a slow start on Monday, as there are just two US releases and no Canadian events on the schedule.

Canadian employment numbers were weak, as Employment Change came in at -28.9 thousand, a four-month low. This was nowhere near the market estimate of 12.8 thousand. The unemployment rate remained unchanged at 6.9%, matching the forecast. In the US, JOLTS Jobs Openings also was a disappointment, slipping to 4.01 million, well off the estimate of 4.21 million. However, the US employment picture remains positive, thanks to strong releases from Nonfarm Payrolls and Unemployment Claims.

Federal Reserve Chair Janet Yellen testified before Congress last week, and gave a cautious thumbs-up to the economic recovery. She said that the economy has improved, but pointed to two sore spots – the job market remains weak and inflation is below the Fed’s target of 2%. Yellen stated that she therefore expects that low interest rate levels will continue for a “considerable time”. Yellen has stated previously that slack remains in the economy, and the Fed is expected to proceed carefully with future trims to its QE scheme. Since December, the Fed has trimmed the asset-purchase program by almost half, cutting it to $45 billion each month.

USD/CAD for Monday, May 12, 2014

USD/CAD May 12 at 15:05 GMT

USD/CAD 1.0898 H: 1.0903 L: 1.0874

USD/CAD Technical

• USD/CAD is showing little movement on Monday.
• On the downside, 1.0852 is providing weak support. There is stronger support line at 1.0775.
• 1.0906 is a weak resistance line. This is followed by the key line of 1.10.
• 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 Monday trading. This is not reflected in the movement of the pair, as the Canadian dollar has posted small gains. The ratio has a majority of long positions, indicative of a trader bias in favor of the US dollar moving to higher ground.

The pair is trading quietly close to the 1.09 line. In the North American session, the Canadian dollar has edged lower.

USD/CAD Fundamentals

• 16:00 US FOMC Member Charles Plosser Speaks.
• 18:00 US Federal Budget Balance. Estimate 112.6B.

*Key releases are highlighted in bold

*All release times are GMT

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