USD/CAD: Struggling Canadian Dollar Dips To 1.30, Housing Starts Drop

The Canadian dollar continues to lose ground, as the currency has posted five straight losing sessions. Currently, is trading at 1.2997, up 0.28% on the day. On the release front, Canadian dropped sharply, from 201,000 to 189,000, well short of the estimate of 203,000. On Wednesday, Canada releases , while the U.S. publishes and the U.S. Treasury Currency report, a semi-annual publication.

Traders are awaiting the U.S. Treasury’s next foreign exchange report, which was last released in April. In that report, the U.S. did not name any of its major partners as currency manipulators, but it did criticize China for the “non-market direction” of its economy. Since then, the Trump administration has imposed some $200 billion in tariffs on Chinese goods. China has retaliated with its own tariffs on U.S. goods, and there has been speculation that China could respond to the U.S. tariffs by devaluating the Chinese yuan, in order to bolster Chinese exports. In 2015 and 2016, the markets dropped sharply on fears that China would implement a major devaluation of its currency. The report should be treated as a market-mover.

Canada’s job numbers in September were excellent, but the Canadian dollar failed to gain ground on the strong data, which was released on Friday. The economy created 63,300 jobs in September, rebounding after losing 51,600 a month earlier. The unemployment rate dipped from 6.0% to 5.9%, matching the estimate. There was more good news as the country posted a surplus of C$0.5 billion. This marked the first surplus since January 2017. On Thursday, Canada releases reports.

USD/CAD Fundamentals

Tuesday (October 9)

  • 5:40 US NFIB Small Business Index. Estimate 108.9. Actual 107.9
  • 8:15 Canadian Housing Starts. Estimate 203K. Actual 189K
  • 14:00 Bank of Canada Senior Deputy Governor Carolyn Wilkins Speaks
  • Tentative – US IBD/TIPP Economic Optimism. Estimate 54.6
  • 21:10 US FOMC Member John Williams Speaks

Wednesday (October 10)

  • 8:30 Canadian Building Permits. Estimate 0.5%
  • 8:30 US PPI. Estimate 0.2%
  • 8:30 US Core PPI. Estimate 0.2%
  • Tentative – US Treasury Currency Report

*All release times are DST

*Key events are in bold

USD/CAD for Tuesday, October 9, 2018

USD/CAD for Oct. 8-10, 2018.

USD/CAD for Oct. 8-10, 2018.

USD/CAD, October 9 at 8:20 DST

Open: 1.2961 High: 1.3000 Low: 1.2951 Close: 1.2998

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2733 12831 1.2970 1.3067 1.3198 1.3198

USD/CAD showed little movement in the Asian session. In European trade, the pair posted small gains but has retracted.

  • 1.2970 has switched to a support level after gains by USD/CAD on Tuesday
  • 1.3067 is the next resistance line
  • Current range: 1.2970 to 1.3067

Further levels in both directions:

  • Below: 1.2970, 1.2831, 1.2733 and 1.2649
  • Above: 1.3067, 1.3198 and 1.3292

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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