USD/CAD - Loonie Struggling As U.S. Unemployment Claims Jump

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By Kenny Fisher

The Canadian dollar continues to lose ground in Thursday trading. In the North American session, USD/CAD is trading in the mid-1.11 range. In economic news, Canadian Current Account posted a wider deficit in January, but managed to beat the estimate. US key releases were a mix, as Core Durable Goods Orders posted a strong gain, but Unemployment Claims came in well above the estimate. The Federal Reserve will be in the spotlight later in the day, as Fed Chair Janet Yellen testifies before a Senate committee.

US manufacturing data looked strong, as Core Durable Goods Orders jumped 1.1% in January. This surprised the markets, which had expected a decline of -0.1%. Unemployment Claims did not look as sharp, as the key indicator rose to 348,000, well above the estimate of 333,000. Meanwhile, a nasty streak of weak US releases ended on Wednesday as New Home Sales jumped by 468,000, crushing the estimate of 406,000. It was the key indicator's best showing since last June, and helped allay concerns about the health of the housing sector, following weak housing numbers last week.

The markets are keeping a close eye on Capitol Hill, as Federal Reserve Chair Janet Yellen testifies before the Senate later on Thursday. Yellen is expected to reiterate that Fed will likely continue trimming QE, barring any downturns in the economy. Last week's Federal Reserve minutes indicated that interest rates are unlikely to rise, even if unemployment drops to 6.5%. Previously, the Fed had said it would consider raising rates at the 6.5% threshold, but with unemployment falling faster than expected, Federal Reserve policymakers agreed that it would “soon be appropriate” to revise the Fed’s forward guidance regarding interest rate levels, and such a move could shake up the currency markets.

USD/CAD for Thursday, February 27, 2014

Forex Rate Graph 21/1/13

USD/CAD February 27 at 15:55 GMT

USD/CAD 1.1150 H: 1.1160 L: 1.1118

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0906 1.1000 1.1094 1.1177 1.1319 1.1496
  • USD/CAD has edged higher in Thursday trading. The pair has touched a high of 1.1160 in the North American session.
  • 1.1094 is providing support. This is followed by a support level at the key level of 1.10.
  • On the upside, 1.1174 could be tested if the US dollar continues to gain ground. This is followed by resistance at 1.1319, which has remained firm since July 2009.
  • Current range: 1.1094 to 1.1177

Further levels in both directions:

  • Below: 1.1094, 1.1000, 1.0906, 1.0852 and 1.0783
  • Above: 1.1177, 1.1319, 1.1496 and 1.1639

ANDA's Open Positions Ratio

USD/CAD ratio is pointing to gains in short positions in Thursday trade. This is not consistent with what we are seeing from the pair, as the Canadian dollar continues to lose ground. The ratio has a majority of short positions, indicating trader bias towards the loonie reversing its current slide.

The wobbly Canadian dollar continues to lose ground on Thursday. The pair has edged higher in the North American session.

USD/CAD Fundamentals

  • 13:30 Canadian Current Account. Estimate -16.5B. Actual -16.0B.
  • 13:30 US Core Durable Goods Orders. Estimate -0.1%. Actual +1.1%.
  • 13:30 US Unemployment Claims. Estimate 333K. Actual 348K.
  • 13:30 US Durable Goods Orders. Estimate -0.7%. Actual -1.0%.
  • 15:00 Federal Reserve Chair Janet Yellen testifies before the Senate Banking Committee.
  • 15:30 US Natural Gas Storage. Estimate -110B. Actual -95B.

*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.