USD/CAD – Subdued Trading Continues

USD/CAD continues to trade in a narrow range, unable to sustain momentum in any direction. The pair is trading in the 1.0150 range early in Wednesday’s North American session. In the US, the markets will be paying close attention as the Federal Reserve releases the minutes of the most recent FOMC meeting. Analysts will be looking to see if the Fed discussed ending its current round of quantitative easing earlier than expected. There are no Canadian releases on Wednesday.

The Canadian dollar has held its own against the US currency this week, despite some weak data out of Canada. The Bank of Canada released its quarterly Business Outlook Survey earlier this week, and the report couldn’t hide the pessimism shared by many Canadian businesses. The survey found that firms plan to reduce hiring and lower their spending, in response to a lack of confidence about economic conditions in the next 12 months. Building Permits, this week’s only major Canadian event, was a major disappointment. The key construction indicator posted a gain of 1.7%, well below the estimate of 3.7%. The US dollar failed to take advantage of the weak Canadian numbers, but this is understandable, keeping in mind the weak data we have recently seen out of the US.

The US continues to churn out disappointing numbers, and every key release over the past two weeks has fallen below expectations. The data comes from across the economy – manufacturing, housing, consumer confidence and employment numbers have all missed their estimates. Employment numbers were dismal, and have helped the euro post impressive gains against the US dollar. this week. Has the US recovery stalled? The US hasn’t released any key fundamentals so far this week. Unemployment Claims will be released on Thursday, and additional major releases are scheduled for Friday. If the US can turn things around and post some stronger numbers, we could see the dollar improve after losing ground to major currencies such as the euro and British pound.

USD/CAD for Wednesday, April 10, 2013

1.0154  H: 1.0168 L: 1.0143

USD/CAD Technical

USD/CAD continues to tread softly, trading in a narrow range. On the upside, the pair is testing the 1.0157, which has seen a lot of activity this week. There is stronger resistance at 1.0229. On the downside, there is support at the round number of 1.01. This is followed by 1.0041, which is protecting the all-important parity level.

•  Current range: 1.01 to 1.0157.

Further levels in both directions:

• Below: 1.01, 1.0041, 1.00 and 99.46
• Above: 1.0157, 1.0229, 1.0282, 1.0361 and 1.0446

OANDAa’s Open Position Ratios

USD/CAD ratio continues to be quiet in the Wednesday session. This is consistent with what we are seeing from the pair, as USD/CAD trades close to the 1.0150 line. Traders should keep an eye on the ratio, as renewed movement could be a sign that the pair will break out of the narrow band it now finds itself.

USD/CAD continues to be uneventful, and shrugged off some weak Canadian numbers on Tuesday. We will see some key releases out of the US on Thursday and Friday, and these could well shake up the pair out of  its current slumber.

USD/CAD Fundamentals

• 14:30 US Crude Oil Inventories. Estimate 1.6M.
• 17:00 US 10-year Bond Auction.
• 18:00 US FOMC Meeting Minutes.
• 18:00 US Federal Budget Balance. Estimate -110.3B.

*Key releases are highlighted in bold

*All release times are GMT

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