By Kenny Fisher
The Canadian dollar is showing little activity, as USD/CAD trades close to the 1.11 line. It's a quiet day on the release front, with just one minor release on the schedule. There are no Canadian releases on Tuesday.
After a less than stellar week, US releases started the new trading week on a positive note. ISM Manufacturing PMI improved to 53.2 points in January, beating the estimate of 52.3. On Friday, Pending Home Sales posted a paltry gain of 0.1%, well below the estimate of a 2.9% gain. However, the reading was a strong improvement over the January reading of -8.7%. Earlier in the week, Unemployment Claims came in above the estimate and GDP also missed the forecast. Although market sentiment remains positive about the US economy, recent key releases have not impressed, and the dollar will find itself under pressure this week if US numbers don't show improvement.
In her testimony last week before the US Senate, Yellen said that the Fed remains committed to tapering QE and would like to wind up the bond-buying scheme by the fall. At the same time, she acknowledged the string of weak US releases recently and said that the Fed would closely monitor to what extent the weak numbers are due to cold weather and what portion can be attributed to a "softer outlook". The next Fed policy meeting takes place in mid-March and the markets will be expecting another $10 billion cut to QE.
USD/CAD for Tuesday, March 4, 2014
USD/CAD March 4 at 15:00 GMT
USD/CAD 1.1080 H: 1.1102 L: 1.1062
- USD/CAD is showing little movement in Tuesday trade. The pair touched broke above the 1.11 line in the Asian line, touching a high of 1.1102.
- 1.1094 has switched to a resistance role. It is a weak line which could be tested during the North American session.
- The key line of 1.10 is providing support to the pair. Next, there is support at 1.0906, protecting the 1.09 level.
- 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 1.1639
OANDA's Open Positions Ratio
USD/CAD ratio is unchanged in Tuesday trade. This is consistent with what we are seeing from the pair, which is showing little movement. The ratio has a majority of short positions, indicating trader bias towards the loonie moving to higher levels.
The pair is trading close to the 1.11 level and is trading quietly in the North American session.
- 15:00 US IBP/TIPP Economic Optimism. Estimate 45.6 points. Actual 45.1 points.
*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.