It has been another quiet day for USD/CAD, as the pair trades in the low-1.07-range early in the North American session. On the release front, US Retail Sales dipped last month, while Core Retail Sales improved to a three-month high. The Empire State Manufacturing Index posted strong gains in June. As well, Federal Reserve chair Janet Yellen begins two days of testimony on Capitol Hill. There are no Canadian releases on Tuesday.
In the US, retail sales releases, the primary indicators of consumer spending, marked the first key events of the week. Retail Sales slipped to 0.2%, well off the estimate of 0.6%. There was better news from Core Retail Sales, which excludes the most volatile items included in Retail Sales. The indicator improved to 0.4%, a three-month high. This was just shy of the estimate of 0.5%. There was excellent news from the manufacturing sector, as the Empire State Manufacturing Index jumped to 25.6 points, its third straight rise.
Janet Yellen visits Capitol Hill this week, starting with testimony on Tuesday before the Senate Banking Committee. The Federal Reserve minutes, released last week, did not shed much light on when the Fed plans to raise interest rates, but policymakers did agree to wind up the QE scheme by October. The asset purchase program flooded the economy with over $2 trillion, and the Fed has been steadily reducing the program since last December. Winding down QE, which currently stands at $45 billion/month, will require several more tapers by the Fed, but that shouldn't pose a problem, as the US economy continues to improve. The markets will be closely following Yellen's remarks, looking for clues regarding the timing of a rate hike.
Canadian employment numbers were dismal last Friday. Employment Change, one of the most important indicators, came in at -9.4 thousand, shocking the markets which had anticipated a strong gain of 20.7 thousand. Unemployment Rate disappointed, as the rate rose to 7.1%, up from 7.0% which was the market estimate. This is the highest unemployment rate we've seen in 2014. The weak job numbers led to the loonie shedding close to a cent and dropping to two-week lows against its US counterpart.
USD/CAD July 15 at 14:15 GMT
- USD/CAD 1.0730 H: 1.0741 L: 1.0716
USD/CAD Technicals
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1.0414 | 1.0572 | 1.0678 | 1.0775 | 1.0852 | 1.0961 |
- USD/CAD edged higher in the Asian session. The pair was steady in the European sessions and this continues early in North American trade.
- 1.0775 is the next resistance line. It could face pressure during the day. 1.0852 follows.
- 1.0678 is providing support. 1.0572 is stronger.
- Current range: 1.0572 to 1.0678
Further levels in both directions:
- Below: 1.0678, 1.0572, 1.0414 and 1.0271
- Above: 1.0775, 1.0852, 1.0961 and 1.1004
OANDA's Open Positions Ratio
USD/CAD ratio is pointing to gains in long positions on Tuesday. This is consistent with the movement of the pair, as the US dollar has edged higher. The ratio has a substantial majority of long positions, indicative of strong trader bias towards the US dollar gaining ground.
USD/CAD Fundamentals
- 12:30 US Core Retail Sales. Estimate 0.5%. Actual 0.4%.
- 12:30 US Retail Sales. Estimate 0.6%. Actual 0.2%.
- 12:30 US Empire State Manufacturing Index. Estimate 17.2 points.
- 12:30 US Import Prices. Estimate 0.5%.
- 14:00 US Federal Reserve Chair Janet Yellen Testifies Before Senate Banking Committee.
- 14:00 US Business Inventories. Estimate 0.6%. Actual 0.5%.
* Key releases are highlighted in bold
*All release times are GMT