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USD/CAD – Canadian Dollar Slide Continues

By Kenny FisherForexDec 07, 2017 10:12
ca.investing.com/analysis/usdcad--canadian-dollar-slide-continues-as-boc-holds-steady-200196450
USD/CAD – Canadian Dollar Slide Continues
By Kenny Fisher   |  Dec 07, 2017 10:12
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The Canadian dollar has posted losses in the Thursday session. USD/CAD is trading at 1.2832, up 0.36% on the day. On the release front, Canada will release Building Permits and the Ivey PMI. The U.S. publishes unemployment claims, which are expected to tick up to 239,000. On Friday, the U.S. publishes three key employment indicators – Average Hourly Earnings, Nonfarm Employment Change and the unemployment rate. The week wraps up with the release of UoM Consumer Sentiment.

The Bank of Canada did not pull any surprises Wednesday, and maintained the benchmark rate at an even 1.00%. The Canadian dollar lost ground after the rate announcement, which was dovish in tone. The bank said that there was slack in the labor market, and investors took this as a sign that a January rate hike was less likely. Another uncertainty facing the BoC is NAFTA, as a protectionist-minded U.S. administration has threatened to torpedo the free-trade agreement unless Canada and Mexico make major concessions. An additional headache for the BoC is that the Federal Reserve is expected to raise rates in December and January. The BoC will have to follow suit with a raise of its own, or watch the Canadian dollar head lower against the greenback.

The ADP nonfarm employment report came in as expected, with a gain of 190,000. Still, this was a soft reading compared with the previous release, which showed a gain of 235,000. Attention now turns to the official nonfarm employment change release on Friday. Again, the markets are expecting a soft landing, with a forecast of 200,000, down from 261,000 in the October release. If nonfarm payrolls, one of the most important indicators, is weaker than expected, the U.S. dollar could lose ground.

USD/CAD Fundamentals

Thursday (Dec. 7)

  • 7:30 U.S. Challenger Job Cuts. Actual 30.1%
  • 8:30 Canadian Building Permits. Actual 1.7%
  • 8:30 U.S. Unemployment Claims. Estimate 239K
  • 10:00 Canadian Ivey PMI. Estimate 62.7
  • 10:30 US Natural Gas Storage. Estimate -5B
  • 15:00 US Consumer Credit. Estimate 17.4B

Friday (Dec. 8)

  • 8:15 Canadian Housing Starts. Estimate 214K
  • 8:30 U.S. Average Hourly Earnings. Estimate 0.3%
  • 8:30 U.S. Nonfarm Employment Change. Estimate 198K
  • 8:30 U.S. Unemployment Rate. Estimate 4.1%
  • 10:00 US Preliminary UoM Consumer Sentiment. Estimate 99.0

*All release times are GMT

*Key events are in bold

USD/CAD for Thursday, Dec. 7, 2017

USD/CAD for Dec. 6-8, 2017.
USD/CAD for Dec. 6-8, 2017.

USD/CAD, Dec. 7 at 7:55 EDT

Open: 1.2787 High: 1.2840 Low: 1.2786 Close: 1.2832

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2494 1.2630 1.2757 1.2860 1.3015 1.3161

USD/CAD has edged higher in the Asian and European sessions

  • 1.2757 is providing support
  • 1.2860 is the next resistance line
  • Current range: 1.2757 to 1.2860

Further levels in both directions:

  • Below: 1.2757, 1.2630, 1,2494, and 1.2368
  • Above: 1.2860, 1.3015 and 1.3161

OANDA’s Open Positions Ratio

USD/CAD ratio is showing movement towards short positions. Currently, long positions have a majority (54%), indicative of trader bias towards USD/CAD reversing directions and moving lower.

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.

USD/CAD – Canadian Dollar Slide Continues
 

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USD/CAD – Canadian Dollar Slide Continues

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