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By Kenny Fisher

USD/CAD has edged higher on Wednesday, as the pair trades in the mid-1.06 range early in the North American session. On the release front, there was excellent news on the US employment front, as ADP Nonfarm Payrolls climbed sharply in June. There are no Canadian releases on Wednesday.

In the US, ADP Nonfarm Payrolls exceeded all expectations, adding 281 thousand jobs in June. This easily beat the estimate of 207 thousand and bodes well for the official Nonfarm Payrolls which will be released on Thursday (a day earlier than usual due to the Fourth of July holiday in the US). If Nonfarm Payrolls can beat the estimate, we could see the US dollar move higher.

Last week's US GDP release for Q1 was a disaster, as the economy contracted by almost 3%. However, the markets remained calm, and the US dollar escaped without much damage against most of its major rivals. More recent releases have been better, notably consumer confidence, housing data and Wednesday's excellent ADP Nonfarm Payrolls.

Canadian GDP had another weak outing in May. The key indicator, which is released each month, came in at just 0.1%, unchanged from a month earlier. This was shy of the estimate of 0.2%, and points to weak economic activity. The weak GDP comes on the heels of weak inflation numbers from Canada's manufacturing industry. The Raw Materials Price Index has been dropping, and the downward trend continued in May, as the index came in at -0.4%, way off the estimate of +1.3%. The Industrial Product Price Index followed suit with a reading of -0.5%, compared to the estimate of +0.4%.

USD/CAD for Wednesday, July 2, 2014

USD/CAD July 2 at 14:15 GMT

USD/CAD 1.0663 H: 1.0664 L: 1.0627

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0271 1.0414 1.0572 1.0678 1.0775 1.0852

  • On the upside, 1.0678 remains under strong pressure. 1.0775 is stronger.
  • 1.0572 is providing the pair with strong support. This is followed by support at 1.0414, which has held firm since October 2013.
  • Current range: 1.0572 to 1.0678

Further levels in both directions:

  • Below: 1.0572, 1.0414, 1.0271 and 1.0182
  • Above: 1.0678, 1.0706, 1.0775 and 1.0852

OANDA's Open Positions Ratio

USD/CAD ratio is pointing to gains in Wednesday trade. This is consistent with the movement of the pair, as the Canadian dollar has posted slight losses. The ratio has a majority of long positions, indicative of trader bias towards the US dollar continuing to gain ground.

USD/CAD Fundamentals

  • 12:15 US ADP Nonfarm Employment Change. Estimate 207K. Actual 218K.
  • 14:00 US Factory Orders. Estimate -0.4%.
  • 14:30 US Crude Oil Inventories. Estimate -2.2M.
  • 15:00 US Fed Chair Janet Yellen Speaks.

*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.