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USD/CAD – Canadian Dollar Under Pressure as US Posts Strong Job Data

USD/CAD has posted slight gains on Wednesday, as the pair trades at the 1.14 line in the North American session. The Canadian dollar has lost about 250 points in the past week, as the currency finds itself at its lowest level since July 2009.
On the release front, ADP Nonfarm Employment Change climbed to 230 thousand, well above expectations. As well, ISM Non-Manufacturing PMI softened, posting a reading of 57.1 points. There are no Canadian releases on Wednesday, but we’ll get a look at Building Permits and Ivey PMI on Thursday. The markets are expecting strong readings from both key events, which could help the struggling Canadian dollar.
US job numbers have been solid in recent readings, and the trend continued with ADP Nonfarm Payrolls on Wednesday. The key indicator climbed to 230 thousand, easily beating the estimate of 214 thousand. This marked the indicator’s strongest showing in 2014. We’ll get a look at Unemployment Claims and the official Nonfarm Payrolls later in the week. Meanwhile, the ISM Non-Manufacturing PMI slipped for a second straight month, falling to 57.1 points, shy of the estimate of 589.2 points. This marked a four-month low for the PMI. This release follows ISM Manufacturing PMI, which improved to 59.0 points last month, easily beating the estimate of 56.5 points.

USD/CAD for Wednesday, November 5, 2014

USD/CAD November 5 at 16:30 GMT
USD/CAD 1.1402 H: 1.1467 L: 1.1384

USD/CAD Technical
S3 S2 S1 R1 R2 R3
1.1004 1.1124 1.1278 1.1414 1.1493 1.1669

  • USD/CAD posted gains late in the Asian session and this continued early in European trade, as the pair tested resistance at 1.1414. The pair then reversed directions and has given up the gains made earlier in the day.
  • 1.1278 has strengthened in support as the pair trades at higher levels.
  • On the upside, 1.1414 was tested earlier and remains under pressure. Will the pair break above this line? 1.1493 is stronger.
  • Current range: 1.1278 to 1.1414
Further levels in both directions:
  • Below: 1.1278, 1.1124, 1.1004, 1.0961 and 1.0865
  • Above: 1.1414, 1.1493, 1.1669 and 1.1723

OANDA’s Open Positions Ratio
USD/CAD ratio is pointing to gains in short positions on Wednesday. With USD/CAD continuing to post strong gains, additional long positions have been covered, resulting in a greater percentage of open short positions. The ratio has a majority of short positions, indicting trader bias towards the Canadian dollar reversing direction and moving to higher ground.

USD/CAD Fundamentals
  • 13:30 Canadian Trade Balance. Estimate CAD -0.7B. Actual CAD +0.7B.
  • 13:15 US ADP Non-Farm Employment Change. Estimate 214K. Actual 230K
  • 14:15 US FOMC Member Narayana Kocherlakota Speaks.
  • 14:45 US Final Services PMI. Estimate 57.3 points. Actual 57.1 points.
  • 15:00 US ISM Non-Manufacturing PMI. Estimate 58.2 points.
  • 15:30 US Crude Oil Inventories. Estimate 1.8M.
* Key releases are in highlighted bold.
*All release times are GMT

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