USD/CAD – Canadian Dollar Continues to Trade Quietly, US Advance GDP Next

The Canadian dollar is showing limited movement in the Friday session. Currently, USD/CAD is trading at 1.2885, up 0.11% 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.

The US dollar continues to shine and the Canadian dollar has dropped 2.1% since April 16. On Friday, the US dollar has pushed the Canadian currency to the 1.29 level for the first time since April 3. Much of the credit for the greenback rally goes to rising yields on US bonds, which hit 4-year highs this week. On Wednesday, 10-year US Treasury notes climbed above the symbolic level of 3.0%, which led to investors snapping up bonds at the expense of equities. As oil prices have been moving higher, this has led to expectations of higher inflation, which in turn, has increased sentiment that the Federal Reserve will increase rates four times in 2018, rather than three hikes. This has made the US dollar more attractive to investors.

Investors were keeping a close eye on the Bank of Canada earlier this week, as Governor Stephen Poloz testified before a parliamentary committee. Poloz sounded cautiously optimistic about economic conditions. He said that he expected the economy to improve after a disappointing first quarter and projected 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 would prefer to see the NAFTA negotiations concluded before making any rate moves. The talks have made significant progress, raising hopes that the sides will announce an agreement framework soon, with the fine print to be finalized later in the year.

The $ continues to test the fringes of bullishness

 

USD/CAD Fundamentals

 Friday (April 27)

  • 8:30 US Advance GDP. Estimate 2.0%
  • 8:30 US Advance GDP Price Index. Estimate 2.2%
  • 8:30 US Employment Cost Index. Estimate 0.7%
  • 10:00 US Revised UoM Consumer Sentiment. Estimate 98.0
  • 10:00 US Revised UoM Inflation Expectations

*All release times are DST

*Key events are in bold

 

USD/CAD for Friday, April 27, 2018

USD/CAD, April 27 at 7:50 DST

Open: 1.2871 High: 1.2900 Low: 1.2866 Close: 1.2885

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2687 1.2757 1.2850 1.2943 1.3015 1.3125

USD/CAD was flat in the Asian session. The pair recorded slight gains in European trade but has retracted

  • 1.2850 is providing support
  • 1.2943 is the next resistance line
  • Current range: 1.2850 to 1.2943

Further levels in both directions:

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

OANDA’s Open Positions Ratio

USD/CAD ratio is showing movement towards short positions. Currently, short positions have a majority (58%), indicative of slight trader bias towards USD/CAD reversing directions and moving downwards.

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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