The Canadian dollar continues to head lower and has posted considerable losses in the Thursday session. Currently, USD/CAD is trading at 1.2895, up 0.47% on the day. On the release front, Canadian Corporate Profits rebounded in the first quarter with a strong gain of 2.7%. In the U.S., unemployment claims jumped to 234,000, its highest level in seven weeks. As well, Existing Home Sales dropped to 5.42 million, well off the estimate of 5.56 million. On Friday, the U.S. will publish durable goods orders as well as consumer confidence.
The Federal Reserve released the minutes from its May meeting. In the minutes, some Fed policy-makers said they favored removing the phrase that “the stance of monetary policy remains accommodative.” Not surprisingly, the minutes didn’t shed light on the Fed’s plans, saying that another rate hike would occur “soon,” on the assumption that the U.S. economy continues to perform as expected. Still, a quarter-point rate hike in August is virtually a given, with the CME Group (NASDAQ:CME) setting the odds of a hike at 95 percent. This would mark a second hike in 2018. After that? The Fed projection remains at three rates hikes in 2018, but some analysts are predicting four increases this year.
Earlier this week, there seemed to be some positive momentum regarding the U.S.-China trade talks. However, President Donald Trump has since voiced skepticism over progress in the negotiations, saying he was ‘not really’ satisfied with the results. This has been followed by reports on Wednesday that the U.S. is investigating auto imports on national security concerns, which has raised concerns that U.S. tariffs could shake-up the global auto sector. Trump’s comments have confused the markets, as Treasury Secretary Steven Mnuchin declared on the weekend that the trade spat was ‘on hold.’ Investor risk appetite has also waned as there is uncertainty whether North Korean leader Kim Jong-un will meet with Trump next month. On Tuesday, Trump acknowledged that there was a ‘substantial’ chance that the summit planned with Kim in Singapore on June 12 would not take place.
USD/CAD Fundamentals
Thursday (May 24)
- 4:15 US FOMC Member William Dudley Speaks
- 8:30 Canadian Corporate Profits. Actual 2.7%
- 8:30 US Unemployment Claims. Estimate 220K. Actual 234K
- 9:00 US HPI. Estimate 0.5%. Actual 0.1%
- 10:00 US Existing Home Sales. Estimate 5.56M. Actual 5.42M
- 10:30 US Natural Gas Storage. Estimate 92B
- 10:35 US FOMC Member Rafael Bostic Speaks
Friday (May 25)
- 8:30 US Core Durable Goods Orders. Estimate 0.5%
- 8:30 US Durable Goods Orders. Estimate -1.3%
- 9:20 US Fed Chair Powell Speaks
- 10:00 US Revised UoM Consumer Sentiment. Estimate 98.8
- 10:00 US Revised UoM Inflation Expectations
- 11:45 US FOMC Member Rafael Bostic Speaks
*All release times are DST
*Key events are in bold
USD/CAD for Thursday, May 24, 2018
USD/CAD, May 24 at 10:20 DST
Open: 1.2835 High: 1.2920 Low: 1.2829 Close: 1.2894
USD/CAD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1.2687 | 1.2757 | 1.2850 | 1.2943 | 1.3015 | 1.3125 |
USD/CAD was flat in the Asian session. The pair posted gains in European trade and continues to move higher in North American trade
- 1.2850 has switched to a support role as USD/CAD has moved higher
- 1.2943 is the next resistance line
- Current range: 1.2850 to 1.2943
Further levels in both directions:
- Below: 1.2850, 1.2757, 1.2687 and 1.2527
- Above: 1.2943, 1.3015 and 1.3125
OANDA’s Open Positions Ratio
USD/CAD ratio is showing slight gains towards short positions. Currently, short positions have a majority (58%), indicative of trader bias towards USD/CAD reversing directions and moving lower.
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