By Kenny Fisher
The Canadian dollar continues to show little activity this week, as USD/CAD continues to trade in the mid-1.10 range early in the North American session. In economic news, new Fed chief Janet Yellen testified before Congress and said that the Fed planned to continue tapering its QE scheme. US JOLTS Jobs Openings fell short of the estimate for January. The Canadian government will release its annual budget later on Tuesday.
There wasn't much new from incoming Fed head Janet Yellen, who testified on Tuesday before the House Financial Services Committee. Yellen said that the Fed plans to continue trimming QE, provided that the employment picture continues to improve and inflation rises. She acknowledged that event though the unemployment rate has improved steadily, the recovery in the labor market is far from complete. Meanwhile, JOLTS Job Openings, a key event, showed little change in January, with a reading of 3.99 million. This was short of the estimate of 4.04 million, as we continue to see employment data below market expectations.
The federal government will hand down a budget later on Tuesday, and this could be a market-mover, especially if the government takes some unpopular steps in response to a weak economy. The week didn't start out well, as Canadian Housing Starts dropped to 180 thousand, its lowest gain since August, and fell short of the estimate. This release follows a sharp decline in Building Permits last week, pointing to trouble in the housing and construction sectors. There was some good news on Friday, as Employment Change posted a gain of 29.4 thousand in January, after a shocking decline of 45.9 thousand a month earlier. The indicator easily beat the estimate of 19.7 thousand.
USD/CAD for Tuesday, February 11, 2014
USD/CAD February 11 at 15:45 GMT
USD/CAD 1.1044 H: 1.1091 L: 1.1031
- USD/CAD is showing little activity in Tuesday trading. The pair touched a high of 1.1091 early in the Asian session but was unable to consolidate these gains.
- The key level of 1.100 is providing support. This is a weak line which could face pressure if the US dollar softens. This is followed by a support line at 1.0906, protecting the 1.09 line.
- On the upside, 1.1094 is providing resistance. There is stronger resistance at 1.1177.
- Current range: 1.1000 to 1.1094
Further levels in both directions:
- Below: 1.1000, 1.0906, 1.0852 and 1.0783
- Above: 1.1094, 1.1177, 1.1319, 1.1496 and 1.1610
OANDA's Open Positions Ratio
USD/CAD ratio is almost unchanged in Tuesday trading. This is consistent with what we are seeing from the pair, which is showing little movement. The ratio continues to be made up of a majority of short positions, indicating a trader bias towards the Canadian dollar breaking out and moving to higher ground.
USD/CAD has been marked by a quiet week so far. We could see some movement from the pair after the Canadian government hands down its budget later in the day.
- 12:30 US NFIB Small Business Index. Exp. 93.6 points. Actual 94.1 points.
- 14:00 US FOMC Member Charles Plosser Speaks.
- 15:00 US Fed Chair Janet Yellen testifies before the House Financial Services Committee.
- 15:00 US JOLTS JOB Openings. Exp. 4.04M. Actual 3.99M.
- 15:00 US Wholesale Inventories. Exp. 0.5%. Actual 0.3%.
- 21:00 Canadian Annual Budget Release.
*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.