USD/CAD - Strong Greenback Pushes Above 1.06

Nov.27.13 | About: PowerShares DB (UUP)

By Kenny Fisher

The U.S. dollar continues to push higher on Wednesday, as USD/CAD is trading close to the 1.06 line. The U.S. dollar got a boost as Unemployment Claims dropped to its lowest levels in two months. However, Core Durable Goods Orders posted a decline and fell short of the estimate. There are no Canadian releases on Wednesday.

In the U.S., Unemployment Claims continues to look sharp, as the key indicator dropped to 316 thousand, its lowest level in two months. This figure easily beat the estimate of 331 thousand. However, the news was not as good from the manufacturing sector, as Core Durable Goods Orders posted a drop of 0.1% for the third month running. The key indicator has not posted a gain since May. Durable Goods was awful, posting a decline of 2.0%, well below the estimate of a 1.5% drop.

The Canadian dollar continues to struggle against its U.S. counterpart. The currency is trading close to the 1.06 line on Wednesday, its highest level since early July. The surging U.S. dollar has gained about 250 points in a little over a week, and we could see the rally continue.

Low inflation indicators have been a major concern in Canada, Japan and the eurozone, and the U.S. is not immune from this problem either. The Producer Price Index continues to look weak, posting a decline of 0.2% in October. This was the index’s second straight decline. Core CPI showed a weak gain of 0.1%, and CPI dipped to -0.1%. These weak numbers have raised concern about the health of the U.S. economy.

USD/CAD for Wednesday, November 27, 2013

Forex Rate Graph 21/1/13

USD/CAD November 27 at 16:15 GMT

USD/CAD 1.0587 H: 1.0602 L: 1.0532

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0442 1.0502 1.0573 1.0652 1.0837 1.0945
Click to enlarge
  • USD/CAD has posted more gains on Wednesday, as the Canadian dollar remains under strong pressure.
  • On the upside, the pair is facing resistance at 1.0652. This line could face pressure if the U.S. dollar continues to move upwards. This is followed by a resistance line at 1.0837, which has held firm since May 2010.
  • The pair continues to receive support at 1.0573. This weak line could see activity during the North American session. This line is followed by support at 1.0502, which is protecting the 1.05 line.
  • Current range: 1.0573 to 1.0652

Further levels in both directions:

  • Below: 1.0573, 1.0502, 1.0442, 1.0337 and 1.0282
  • Above 1.0652, 1.0837 and 1.0945 and 1.10

OANDA's Open Positions Ratio

USD/CAD ratio is pointing to gains in short positions in Wednesday trading. This is not reflected in the current movement of the pair, as the U.S. dollar continues to rally. A majority of the open positions in the USD/CAD ratio are short, indicating a trader bias towards the Canadian dollar reversing its current slide and moving to higher ground.

The Canadian dollar remains under pressure in Wednesday trading, as the U.S. dollar has climbed close to the 1.06 line. We could see the U.S. dollar, which has strong momentum, continue to post gains during the North American session.

USD/CAD Fundamentals

  • 13:30 U.S. Core Durable Goods Orders. Estimate.0.5%. Actual -0.1%.
  • 13:30 U.S. Unemployment Claims. Estimate 331K. Actual 316K.
  • 13:30 U.S. Durable Goods Orders. Estimate -1.5%. Actual -2.0%
  • 14:45 U.S. Chicago PMI. Estimate 60.6 points.
  • 14:55 U.S. Revised UoM Consumer Sentiment. Estimate 73.1 points.
  • 14:55 U.S. Revised UoM Inflation Expectations. Actual 2.9%.
  • 15:00 CB Leading Index. Estimate 0.1%. Actual 0.2%.
  • 15:30 U.S. Crude Oil Inventories. Estimate 0.5M. Actual 3.0M.
  • 17:00 U.S. Natural Gas Storage. Estimate -11B.

*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.