USD/CAD: Canadian Dollar Higher | CA

is down slightly in the Thursday session. Currently, the pair is trading at 1.3470, down 0.07% on the day. On the release front, Canadian are expected to post a gain of 0.4% after two straight declines. Canada will also release ADP (NASDAQ:) nonfarm payrolls, which declined by 23,000 last week. In the U.S., the is expected to rise to 15.1, while jobless claims are forecast to increase to 216,000. On Friday, there are key events on both sides of the border. Canada releases and , while the U.S. will publish , and .

The Federal Reserve delivered the goods as far as a rate hike, marking the fourth rate hike of the year. The benchmark rate is currently in a range between 2.25 and 250 percent. However, the U.S. dollar is broadly lower on Thursday, as the markets had expected a more dovish message in the rate statement. There was speculation that the Fed would “compensate” investors with a very dovish statement, given that the markets have been in turmoil for weeks and the U.S. economy appears to be cooling down. However, the Fed seems bent on continuing to raise rates in 2019 – most significantly, policy-makers did not remove the critical phrase “further gradual increases” from their statement. At the same time, the dot plot forecast was lowered for 2019, from three rate rises to two. This marks a U-turn for the Fed, as back in October, Fed Chair Jerome Powell talked about continuing to raise rates until the “neutral rate” range was met. This range has been somewhat unclear, allowing Powell to say on Thursday that the “lower end” of the range has been achieved.

Just a few months ago, the markets were predicting a “rate hike every quarter” for 2019, but such heady talk has disappeared, as Fed policy-makers have responded to economic data that is pointing to slower growth. The policy of gradual rate hikes bears much of the responsibility for the volatility in the equity markets, and the message from the Fed that more hikes are coming will likely mean that the volatility will continue in December and into the new year. This will likely translate into volatility for the Canadian currency, which is sensitive to the level of risk appetite on the part of investors.

USD/CAD Fundamentals

Friday (December 21)

  • 8:30 Canadian Core Retail Sales. Estimate 0.2%
  • 8:30 Canadian Retail Sales. Estimate 0.4%
  • 8:30 Canadian GDP. Estimate 0.2%
  • 8:30 US Core Durable Goods Orders. Estimate 0.3%
  • 8:30 US Final GDP. Estimate 3.5%
  • 8:30 Durable Goods Orders. Estimate 1.6%
  • 10:00 US Core PCE Price Index. Estimate 0.2%
  • 10:00 US Personal Spending. Estimate 0.3%
  • 10:00 US Revised UoM Consumer Sentiment. Estimate 97.6

*All release times are EST

*Key events are in bold

USD/CAD for Thursday, December 20, 2018

USD/CAD for Dec. 19-21, 2018.

USD/CAD for Dec. 19-21, 2018.

USD/CAD, December 20 at 7:45 EST

Open: 1.3480 High: 1.3505 Low: 1.3447 Close: 1.3470

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.3292 1.3383 1.3461 1.3552 1.3696 1.3793

In the Asian session, USD/CAD ticked lower but then recovered. The pair is down slightly in European trade

  • 1.3383 was tested in support earlier. It is a weak line
  • 1.3552 is the next resistance line
  • Current range: 1.3461 to 1.3552

Further levels in both directions:

  • Below: 1.3461, 1.3383, 1.3292 and 1.3198
  • Above: 1.3552, 1.3696 and 1.3793

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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