Trading Ideas

USD/CAD – Canadian Dollar Jumps As Trade Balance Beats Expectations

6 February 2015, 08:53
Andrius Kulvinskas
Andrius Kulvinskas
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The Canadian dollar continues to show strong movement this week, posting strong gains on Thursday. USD/CAD is trading in the mid-1.24 range in the North American session. On the release front, Canadian Trade Balance remained steady at C$-0.6 billion. In the US, key data was a mix on Thursday. Unemployment Claims rose last week to 278 thousand but beat the estimate. Trade Balance missed expectations, coming in at $-46.6 billion.

The Canadian dollar has had a busy week and has gained about 140 points on Thursday. The currency reacted positively to a solid Trade Balance report, as the trade deficit remained unchanged at C$-0.6 billion. The markets had expected a much larger deficit of C$-1.2 billion. The loonie has recovered from Wednesday’s losses, which followed a dismal Ivey PMI.. The index dropped to 45.4 points, pointing to contraction for the first time in seven months. The markets had expected a solid reading of 53.8 points.

In the US, Unemployment Claims rose to 278 thousand, up from 265 thousand in the previous release. Still, the reading beat the forecast of 287 thousand. On Wednesday, ADP Nonfarm Employment Change was well off expectations, falling to 213 thousand. The estimate stood at 224 thousand. We could see some stronger movement in gold prices on Friday, with the release of Nonfarm Employment Claims and the Unemployment Rate. Meanwhile, the trade deficit ballooned to $46.6 billion, compared to $39.0 billion a month earlier. This marked the largest trade deficit since May.

 

USD/CAD Technical

S3S2S1R1R2R3
1.21901.22611.23871.24691.25431.2680
  • USD/CAD was uneventful in the Asian and European sessions. The pair has posted sharp losses in the North American session, breaking below support levels at 1.2543 and 1.2469.
  • 1.2469 continues to see action. The pair has reverted to a resistance role as the pair has dropped sharply. 1.2543 is stronger.
  • 1.2387 is an immediate support level.
  • Current range: 1.2387 to 1.2469

Further levels in both directions:

  • Below: 1.2387, 1.2261, 1.2190, 1.2096 and 1.1975
  • Above: 1.2469, 1.2543, 1.2680, 1.2761, 1.2950 and 1.3063

 

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