Seeking Alpha
Currencies, macro, fixed income
Profile| Send Message|
( followers)  

By Kenny Fisher

The Canadian dollar is trading quietly on Wednesday, as USD/CAD trades in the low-1.09 range in the North American session. On the release front, US Retail Sales and Core Retail Sales weakened in July and missed their estimates. There are no Canadian releases on Wednesday.

In the US, employment indicators are under the market microscope, as the strength of the labor market is one of the most important factors influencing the Federal Reserve regarding the timing of an interest rate hike. A rate hike is expected by mid-2015, but stronger economic data, especially on the employment front, could hasten a rate move. There was positive news on Tuesday, as JOLTS Job Openings continued to improve and climbed to a 13-year high. We'll get a look at Unemployment Claims on Thursday.

It's a quiet week for Canadian releases, with just three events on the schedule. Housing Starts started the week in fine form, climbing to 200 thousand last month, which beat the estimate of 194 thousand. It was the indicator's best performance since last June, and has helped the Canadian dollar improve and put some distance between it and the key 1.10 level. We'll get a look at the New Housing Price Index on Wednesday. Little change is expected from the index, which is an important gauge of the strength of the housing sector.

The ongoing crises in Ukraine and the Middle East have not affected the currency markets, but that could change if things deteriorate. The US has accused Russia of massing troops on its border with Ukraine, and tensions are high as the EU has slapped stronger sanctions on Russia, while Moscow has retaliated by banning many food imports from the West. In Iraq, Islamic State militants have attacked and displaced thousands of ethnic Kurds, which has resulted in a growing humanitarian crisis. US President Barak Obama has authorized air strikes against the militants in order to protect the Kurds and safeguard US interests. The situation in Iraq is volatile and could quickly destabilize even further. In Gaza and Israel, nerves are on edge, with a 72-hour ceasefire set to expire on Wednesday night as negotiations in Cairo continue.

USD/CAD for Wednesday, August 13, 2014

USD/CAD August 13 at 14:35 GMT

USD/CAD 1.0917 H: 1.0931 L: 1.0906

USD/CAD Technical

S3S2S1R1R2R3
1.06781.07751.08521.09611.10041.1124
  • USD/CAD has been unable to sustain any momentum in either direction on Wednesday.
  • 1.0961 remains an immediate resistance line. 1.1004 is next.
  • 1.0852 is providing support. 1.0775 follows.
  • Current range: 1.0852 to 1.0961

Further levels in both directions:

  • Below: 1.0852, 1.0775, 1.0678 and 1.0588
  • Above: 1.0961, 1.1004, 1.1124 and 1.1278

OANDA's Open Positions Ratio

USD/CAD ratio is unchanged in Wednesday trade. This is consistent with the pair's lack of movement. The ratio has a small majority of short positions, indicative of slight trader bias towards the Canadian dollar moving to higher ground.

USD/CAD Fundamentals

  • 12:30 US Core Retail Sales. Estimate 0.4%. Actual 0.1%.
  • 12:30 US Retail Sales. Estimate 0.2%. Actual 0.0%.
  • 13:05 FOMC Member William Dudley Speaks.
  • 14:00 US Business Inventories. Estimate 0.4%. Actual 0.4%.
  • 14:30 US Crude Oil Inventories. Estimate -0.8M. Actual 1.4M.
  • 17:01 US 10-year Bond Auction.

* Key releases are in highlighted 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.

Source: USD/CAD - Listless As US Retail Sales Soften