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31 Jul 2014
USD/CAD climbs to 1.0930
FXStreet (Edinburgh) - The USD gained further impulse on Thursday following the release of the US and Canadian dockets, briefly lifting the USD/CAD to session peaks near 1.0930.
USD/CAD firmer despite US releases
After hitting multi-week tops in the vicinity of 1.0930, spot is now returning to the comfort zone around 1.0920/15, following mixed data from the US economy: Initial Claims increased to 302K in the week ended on July 25th vs. estimates at 301K, while the Employment Cost index rose above forecasts 0.7% during the second quarter. On the other hand, the Canadian economy expanded at a monthly pace of 0.4% in May, surpassing both estimates and April’s print. “USDCAD still trades ‘rich’ relative to its current main drivers, but despite that ‘richness’, we can highlight three reasons for the upward bias in the pair: long USD positioning is adjusting upwards to align with rate differentials and market sentiment, AUD and CAD are moving lower to catch up with currencies like EUR, NZD, NOK and SEK which have been weaker for longer, and the main drivers of USDCAD may be migrating towards interest rate differentials which are very much in the USDs favour”, assessed Stephen Gallo, European Head FX Strategy at BMO.
USD/CAD levels to consider
As of writing the pair is up 0.12% at 1.0916 and a breakout of 1.0949 (50% of 1.1279-1.0620) would aim for 1.0962 (high Jun.5) and then 1.1007 (high May 2). On the downside, the immediate support lines up at 1.0900 (low Jul.31) ahead of 1.0850 (low Jul.30) and finally 1.0840 (200-d MA).
USD/CAD firmer despite US releases
After hitting multi-week tops in the vicinity of 1.0930, spot is now returning to the comfort zone around 1.0920/15, following mixed data from the US economy: Initial Claims increased to 302K in the week ended on July 25th vs. estimates at 301K, while the Employment Cost index rose above forecasts 0.7% during the second quarter. On the other hand, the Canadian economy expanded at a monthly pace of 0.4% in May, surpassing both estimates and April’s print. “USDCAD still trades ‘rich’ relative to its current main drivers, but despite that ‘richness’, we can highlight three reasons for the upward bias in the pair: long USD positioning is adjusting upwards to align with rate differentials and market sentiment, AUD and CAD are moving lower to catch up with currencies like EUR, NZD, NOK and SEK which have been weaker for longer, and the main drivers of USDCAD may be migrating towards interest rate differentials which are very much in the USDs favour”, assessed Stephen Gallo, European Head FX Strategy at BMO.
USD/CAD levels to consider
As of writing the pair is up 0.12% at 1.0916 and a breakout of 1.0949 (50% of 1.1279-1.0620) would aim for 1.0962 (high Jun.5) and then 1.1007 (high May 2). On the downside, the immediate support lines up at 1.0900 (low Jul.31) ahead of 1.0850 (low Jul.30) and finally 1.0840 (200-d MA).