USD/CAD

The Canadian dollar has posted slight gains on Thursday, as USD/CAD trades in the low-1.24 range. In Canada, Core CPI posted a 0.2% gain, beating the estimate. CPI, however, came in at -0.2%. In the US, CPI declined by 0.7%, while Core CPI edged higher, posting a small gain of 0.2%. Unemployment Claims climbed to 313 thousand, well above expectations.

There were no surprises on the inflation front, as inflation indicators remain at weak levels. Canadian CPI was up 0.2% in January, good enough to beat the estimate of 0.1%. Core CPI declined by 0.2%, but this also beat the forecast, which was -0.4%. Over in the US, CPI posted a third straight decline, coming in at -0.7%. This was very close to the forecast of -0.6%. Core CPI improved to 0.2%, edging above the estimate of 0.1%. Unemployment Claims jumped to a 6-week high, coming in at 313 thousand. This was much higher than the estimate of 288 thousand.

Janet Yellen testified before Congressional committees on Tuesday and Wednesday, saying that the Fed was “unlikely” to raise interest rates in the next few months, given current economic conditions. Her remarks seemed aimed at quelling rising speculation about a rate hike sometime in mid-2015, which has helped boost the US dollar’s performance against its major rivals. Yellen noted that the continuing economic growth should lead to unemployment continuing to fall. Recent US data has been mixed, but employment numbers have generally been solid.

USD/CAD for Thursday, February 26, 2015

USD/CAD February 26 at 16:05 GMT

USD/CAD 1.2473 H: 1.2531 L: 1.2388

USD/CAD Technical

• USD/CAD was flat in the Asian session. The pair posted gains in the European session and broke above resistance at 1.2469. USD/CAD is steady in the North American session.
• 1.2469 has reverted to a support role and remains fluid. 1.2387 is stronger.
• 1.2543 is an immediate resistance line.
• Current range: 1.2469 to 1.2543

Further levels in both directions:

• Below: 1.2469, 1.2387, 1.2261, 1.2190 and 1.2015
• Above: 1.2543, 1.2680, 1.2761 and 1.2950

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in short positions on Thursday, reversing the direction we saw a day earlier. This is not consistent with the pair’s movement, as the Canadian dollar has posted slight gains. The ratio has a majority of long positions, indicative of trader bias towards USD/CAD moving to higher ground.

USD/CAD Fundamentals

• 13:30 Canadian Core CPI. Estimate 0.1%. Actual 0.2%.
• 13:30 Canadian CPI. Estimate -0.4%. Actual -0.2%.
• 13:30 US Core CPI. Estimate 0.1%. Actual 0.2%.
• 13:30 US CPI. Estimate -0.6%. Actual -0.7%.
• 13:30 US Core CPI. Estimate 0.1%. Actual 0.2%.
• 13:30 US Unemployment Claims. Estimate 288K. Actual 313K.
• 13:30 US Core Durable Goods Orders. Estimate 0.6%. Actual 0.3%.
• 13:30 US Durable Goods Orders. Estimate 1.7%. Actual 2.8%.
• 14:00 US HPI. Estimate 0.5%. Actual 0.8%.
• 14:30 US Natural Gas Storage. Estimate -241B.
• 18:00 US FOMC Member Dennis Lockhart Speaks.

*Key releases are highlighted in bold

*All release times are GMT