USD/CAD – Slight Gains As US Consumer Confidence Slides

The Canadian dollar has edged lower on Tuesday. In the North American session, USD/CAD is trading just short of the 1.11 level. In economic news, US consumer confidence numbers slipped badly in January, dropping below the 80-point level. North of the border, Corporate Profits posted a gain of 0.8%, less than in the previous release.

Another key US release, another disappointing reading – this has been the recent unhappy pattern that we continue to see. The culprit on Tuesday was CB Consumer Confidence. The indicator dropped to 78.1 points, sharply lower than the estimate of 80.7 points in December. The estimate stood at 80.2 points. This is yet another key US release that has pointed downwards in January, following in the footsteps of Building Permits, the Philly Fed Manufacturing Index and Existing Home Sales. The markets will be looking for a turnaround or we could see the US dollar lose ground against its major rivals.

Last week’s Federal Reserve minutes indicated that interest rates are unlikely to rise, even if unemployment drops to 6.5%. Previously, the Fed had said it would consider raising rates at the 6.5% threshold, but with unemployment falling faster than expected, Fed policymakers agreed that it would “soon be appropriate” to revise the Fed’s forward guidance regarding interest rate levels. The minutes also indicated that the Fed will likely continue trimming QE, barring any downturns in the economy.

USD/CAD for Tuesday, February 25, 2014

USD/CAD February 25 at 16:05 GMT

USD/CAD 1.1082 H: 1.1096 L: 1.1055

USD/CAD Technical

• USD/CAD has posted slight gains in Tuesday trade.
• The key level of 1.1000 is providing support. This is followed by a support level at 1.0906, protecting the 1.09 line.
• On the upside, 1.1094 is under pressure and could be tested during the day. This is followed by resistance at 1.1177.
• Current range: 1.1000 to 1.1094

Further levels in both directions:

• Below: 1.1000, 1.0906, 1.0852, 1.0783 and 1.0706
• Above: 1.1094, 1.1177, 1.1319 and 1.1496

OANDA’s Open Positions Ratio

USD/CAD ratio has reversed directions in Tuesday trading, pointing to gains in long positions. This is consistent with what we are seeing from the pair, as the US dollar has moved slightly higher. The ratio has a majority of short positions, indicating trader bias towards the loonie changing directions and moving to higher ground.

The Canadian dollar continues to trade close to the 1.11 level. The pair has shown little activity in the North American session.

USD/CAD Fundamentals

• 14:00 US S&P/CS Composite-20 HPI. Estimate 13.3%. Actual 0.8%.
• 14:00 US HPI. Estimate 0.4%. Actual 0.8%.
• 15:00 US CB Consumer Confidence. Estimate 80.2 points. Actual 78.1 points.
• 15:00 US Richmond Manufacturing Index. Estimate 13 points. Actual -6 points.
• 15:10 US FOMC Member Daniel Tarullo Speaks.

*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.