By Kenny Fisher
The Canadian dollar has posted modest gains on Wednesday, as USD/CAD trades below the 1.10 level in the North American session. In economic news, it's a quiet day in the US, with just three releases. On Tuesday, Fed chair Janet Yellen testified before Congress and reiterated that the Fed plans to continue tapering QE. JOLT Job Openings, a key event, showed little change in January and fell short of the estimate. There are no Canadian releases on Wednesday.
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.
Earlier this week, 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. Meanwhile, the annual federal budget didn't contain any dramatic elements, with the government taking a cautious approach to spending and taxation. Canada is expected to post a budget surplus in 2015, after a long period of deficits.
USD/CAD for Wednesday, February 12, 2014
USD/CAD February 12 at 15:40 GMT
USD/CAD 1.0994 H: 1.1025 L: 1.0976
- USD/CAD has edged lower in Wednesday trading. The pair dropped below the key 1.10 level early in the North American session.
- 1.0906 is providing support. This is followed by a support line at 1.0852.
- On the upside, 1.1000, which has reverted to a resistance role, is being tested. There is stronger resistance at 1.1094.
- Current range: 1.0906 to 1.1000
Further levels in both directions:
- Below: 1.0906, 1.0852, 1.0783 and 1.0706
- Above: 1.1000, 1.1094, 1.1177, 1.1319, 1.1496 and 1.1610
OANDA's Open Positions Ratio
USD/CAD ratio is pointing to gains in long positions. This is not consistent with what we are seeing from the pair, which has edged lower. The ratio continues to be made up of a majority of short positions, indicating a trader bias towards the Canadian dollar posting further gains.
USD/CAD has edged lower on Wednesday and is trading just shy of the key 1.10 level in the North American session.
- 15:00 US Crude Oil Inventories. Estimate 2.5M. Actual 3.3M.
- 18:01 US 10-year Bond Auction.
- 19:00 US Federal Budget Balance. Estimate -16.4B.
*Key releases are highlighted in bold
*All release times are GMT
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