USD/CAD – Sharp ADP Non-Farm Payrolls Lifts Greenback

USD/CAD continues to push higher, as the pair trades in the mid-1.06 range on Wednesday. The pair got some help as ADP Non-Employment Change posted its highest reading in 2013. US Trade Balance and New Home Sales showed improvement, but ISM Non-Farm Manufacturing PMI lost ground and was well off expectations. North of the border, Canada posted its first monthly trade surplus in over a year. As expected, the Bank of Canada held the benchmark interest rate at 1.00%, where it has been pegged since September 2010.

US employment data looked sharp on Wednesday, as ADP Non-Farm Employment Change jumped to 215 thousand, its sharpest gain since December 2012. This strong reading was a welcome change from the dismal reading last month of just 130 thousand and easily surpassed the estimate of 172 thousand. US trade deficit improved to -40.6 billion dollars, slightly off the estimate of -40.6 billion. New Home Sales improved to 444 thousand, well above the estimate of 432 thousand. ISM Non-Farm Manufacturing PMI dropped to 53.9 points, short of the estimate of 55.4 points. It was the PMI’s lowest level since July.

Nothing seems to be going right for the struggling Canadian dollar, which continues to drop despite some solid Canadian releases. Canada posted a small trade surplus of 0.1 billion dollars in November, the first surplus since April 2012. The markets had expected a deficit of 0.7 billion. Late last week, Canadian GDP remained unchanged, posting a second straight gain of 0.3%. This beat the estimate of 0.1%, but the positive reading wasn’t enough to prevent the loonie from losing more ground, as the USD/CAD rally continued. Even with these positive releases, market sentiment has not been strong around the Canadian dollar, which has fallen to three-year lows against the US currency.

USD/CAD for Wednesday, December 4, 2013

USD/CAD December 4 at 15:40 GMT

USD/CAD 1.0684 H: 1.0697 L: 1.0638

USD/CAD Technical

• USD/CAD continues to move higher in Wednesday trading. The pair has touched a high of 1.0697 in the North American session as the Canadian dollar remains under strong pressure.
• On the upside, the pair is facing resistance at 1.0783. This is followed by a resistance line at 1.0852, which has held firm since November 2009.
• 1.0652 is providing weak support. This is followed by a support line at 1.0573.
• Current range: 1.0652 to 1.0783

Further levels in both directions:

• Below: 1.0652, 1.0573, 1.0502, 1.0442 and 1.0337
• Above 1.0783, 1.0852, 1.0945 and 1.10

OANDA’s Open Positions Ratio

USD/CAD ratio is unchanged in Wednesday trading. This is not reflected in the current movement of the pair, as the US dollar continues to pick up ground. A majority of the open positions in the USD/CAD ratio are short, indicating a trader bias towards the Canadian dollar reversing its downward spiral and moving to higher ground.

The Canadian dollar remains under pressure as it trades close to the 1.07 line. With the greenback enjoying strong upward momentum, we could see the upward movement continue in the North American session.

USD/CAD Fundamentals

• 13:15 US ADP Non-Farm Employment Change. Estimate 172K.  Actual 215K.
• 13:30 Canadian Trade Balance. Exp. -0.7B. Actual 0.1B.
• 13:30 US Trade Balance. Estimate -40.3B. Actual -40.6B.
• 15:00 US ISM Non-Manufacturing PMI. Estimate 55.4 points. Actual 53.9 points.
• 15:00 US New Home Sales. Estimate 432K. Actual 444K.
• Sep. Data – US New Home Sales. Estimate 427K. Actual 354K.
• 15:00 Bank of Canada Overnight Rate. Exp. 1.00%. Actual 1.00%.
• 15:00 Bank of Canada Rate Statement.
• 15:30 US Crude Oil Inventories. Estimate -0.5M. Actual -5.6M.
• 16:20 President Barak Obama Speaks.
• 19:00 US Beige Book.

*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.