USD/CAD – Canadian Dollar Trading Sideways, US Durable Goods Next

The Canadian dollar is showing limited movement in the Thursday session. Currently, USD/CAD is trading at 1.2836, down 0.08% on the day. In the US, durable goods orders are expected to soften, and unemployment claims are forecast to drop slightly. There are no Canadian events on the schedule. On Friday, the US releases Advance GDP and UoM Consumer Sentiment.

Bank of Canada Governor Stephen Poloz testified before a parliamentary committee earlier this week, and his message about the economy was positive. Poloz said that he expected the economy to improve after a disappointing first quarter, and forecast that inflation would push above BoC’s target of 2% later in 2018. The bank maintained the benchmark rate at 1.25% last week, but is expected to raise rates as early as May. Policymakers are hoping that the NAFTA negotiations will make sufficient progress to enable the sides to announce an agreement framework, with the fine print to be finalized later in the year.

The markets remain focused on US bond yields, which boosted USD/CAD at the start of the week. US 10-year notes have climbed to 4-year highs this week. On Wednesday, 10-year US Treasury notes climbed to 3.015%, and 2-year bonds increased to 2.504 percent. With inflation appearing to be on the rise, there are stronger expectations that the Federal Reserve will raise rates four times in 2018, which is bullish for the US dollar.

Currency markets yield to dollar demand

USD/CAD Fundamentals

Thursday (April 26)

  • 8:30 US Core Durable Goods Orders. Estimate 0.5%
  • 8:30 US Durable Goods Orders. Estimate 1.6%
  • 8:30 US Unemployment Claims. Estimate 230K
  • 8:30 US Goods Trade Balance. Estimate -74.8B
  • 8:30 US Preliminary Wholesale Inventories. Estimate 0.6%
  • 10:30 US Natural Gas Storage. Estimate -11B

 Friday (April 27)

  • 8:30 US Advance GDP. Estimate 2.0%
  • 10:00 US Revised UoM Consumer Sentiment. Estimate 98.0

*All release times are DST

*Key events are in bold

USD/CAD for Thursday, April 26, 2018

USD/CAD, April 25 at 8:15 DST

Open: 1.2846 High: 1.2871 Low: 1.2824 Close: 1.2836

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2590 1.2687 1.2757 1.2850 1.2943 1.3015

USD/CAD showed little movement in the Asian session. The pair recorded slight gains but then retracted in European trade

  • 1.2757 is providing support
  • 1.2850 was tested earlier in resistance. It is a weak line
  • Current range: 1.2757 to 1.2850

Further levels in both directions:

  • Below: 1.2757, 1.2687 and 1.2590
  • Above: 1.2850, 1.2943, 1.3015 and 1.3125

OANDA’s Open Positions Ratio

USD/CAD ratio is showing little movement in the Thursday session. Currently, short positions have a majority (53%), indicative of slight trader bias towards USD/CAD takes next.

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.

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