USD/CAD – Canadian Dollar Subdued Ahead of Fed Minutes

The Canadian dollar has recorded slight losses in the Tuesday session. Currently, USD/CAD is trading at 1.2669, up 0.16% on the day. On the release front, there are no Canadian releases on the schedule. In the US, the key event is the Federal Reserve minutes from the January meeting. We’ll also get a look at Existing Home Sales, which are expected to climb to 5.61 million. On Thursday, Canada releases retail sales reports and the US will publish unemployment claims.

The week started on a sour note for Canadian indicators, as Wholesales Sales declined 0.5%, short of the estimate of 0.4%. It marked the first decline in three months. The markets are expecting another soft release from Core Retail Sales, a key barometer of consumer spending. The indicator posted a strong gain of 1.6% in December, but is forecast to slow to just 0.1% in January. If consumer spending posts a weak reading, the Canadian dollar could lose more ground. The pair is under pressure, and has shed 1.0% so far this month.

It has been an eventful few weeks for Jerome Powell, who has just commenced his stint as chair of the Federal Reserve. Strong US data in recent weeks has raised speculation that the Fed may need to accelerate the pace of interest rate hikes in 2018. The Fed is currently projecting three rate hikes this year, but if inflation continues to move upwards, many analysts are expecting that the Fed could press the rate trigger four, or even five times in 2018. Meanwhile, concern over higher inflation and more rate hikes sent the stock markets into a frenzy earlier in February. Powell sought to reassure the markets that the Fed was monitoring the situation, but it’s doubtful that the Fed can do much to prevent volatility in the markets.

 

 

USD/CAD Fundamentals

Wednesday (February 21)

  • 9:45 US Flash Manufacturing PMI. Estimate 55.4
  • 9:45 US Flash Services PMI. Estimate 53.8
  • 14:00 US FOMC Meeting Minutes

Thursday (February 22)

  • 8:30 Canadian Core Retail Sales. Estimate 0.1%
  • 8:30 Canadian Retail Sales. Estimate 0.0%

*All release times are GMT

*Key events are in bold

 

USD/CAD for Wednesday, February 21, 2018

USD/CAD, February 21 at 7:40 EST

Open: 1.2548 High: 1.2671 Low: 1.2640 Close: 1.2669

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2351 1.2494 1.2630 1.2757 1.2855 1.2920

USD/CAD has posted small gains in the Asian and European sessions

  • 1.2494 is providing support
  • 1.2630 is a weak resistance line
  • Current range: 1.2494 to 1.2630

Further levels in both directions:

  • Below: 1.2630, 1.2494, 1.2351 and 1.2190
  • Above: 1.2757, 1.2855 and 1.2920

OANDA’s Open Positions Ratio

USD/CAD ratio is showing little movement in the Wednesday session. Currently, short positions have a slender majority (52%), indicative of slight trader bias towards USD/CAD reversing directions and moving lower.

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.

Gold Slides on Concerns of Fed Tightening as Fed Minutes Loom

Gold has posted sharp losses in the Tuesday session. In North American trade, the spot price for an ounce of gold is $1330.89, down 1.16% on the day. On the release front, there are no US events on the schedule. On Wednesday, the Federal Reserve will publish the minutes of its January meeting. As well, the US will release Existing Home Sales.

Gold continues to fluctutate, and the base metal has surrendered much of last week’s gains. Investor fears of more rate hikes from the Fed sparked the turbulence in global stock markets, and gold has shown volatility, as gold prices are sensitive to moves (or expected moves) in interest rates. The Fed is currently projecting three rate hikes this year, but if inflation continues to move upwards, many analysts are expecting that the Fed could press the rate trigger four, or even five times in 2018. This sentiment is weighing on gold, and traders should expect more volatility on Wednesday, as the Fed may show some of its cards regarding future rate policy.

It’s been a busy start for Jerome Powell, who has just commenced his stint as chair of the Federal Reserve. Strong US data in recent weeks has raised speculation that the Fed may need to accelerate the pace of interest rate hikes in 2018.  Meanwhile, concern over higher inflation and more rate hikes sent the stock markets into a frenzy earlier in February. Powell sought to reassure the markets that the Fed was monitoring the situation, but it’s doubtful that the Fed can do much to prevent volatility in the markets.

 

XAU/USD Fundamentals

Tuesday (February 20)

  • There are no US events

Wednesday (February 21)

  • 9:45 US Flash Manufacturing PMI. Estimate 55.4
  • 9:45 US Flash Services PMI. Estimate 53.8

*All release times are GMT

*Key events are in bold

 

XAU/USD for Tuesday, February 20, 2018

XAU/USD February 20 at 12:30 EST

Open: 1346.65 High: 1348.41 Low: 1330.17 Close: 1330.89

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1260 1285 1307 1337 1375 1416
  • XAU/USD posted losses in the Asian and European sessions. The pair continues to lose ground in North American trade
  • 1307 is providing support
  • 1337 has switched to a resistance role following losses from XAU/USD on Tuesday
  • Current range: 1307 to 1337

Further levels in both directions:

  • Below: 1307, 1285 and 1260
  • Above: 1337, 1375, 1416 and 1433

OANDA’s Open Positions Ratio

XAU/USD ratio is showing slight movement towards short positions. Currently, short positions have a majority (60%), indicative of trader bias towards XAU/USD continuing to move lower.

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.