Economic Events
US Markets are closed for Martin Luther King Holiday
Jan 16:
13:30 – Canada – New Motor Vehicle Sales (MoM), 2.1%, 1.5%, 1
Jan 17:
13:30 – Canada – Canadian Investment in Foreign Securities (Nov), $-2.22B, 1
13:30 – Canada – Foreign investment in Canadian securities (Nov), $6.97B, $2.03B, 1
13:30 – United States – NY Empire State Manufacturing Index (Jan), 10.90, 9.53, 1
n/a – Canada – Bank of Canada Monetary Policy Report, 3
Jan 18:
12:00 – United States – MBA Mortgage Applications (Jan 13), 4.5%, 1
13:30 – United States – Producer Price Index (MoM) (Dec), 0.2%, 0.3%, 1
13:30 – United States – Producer Price Index (YoY) (Dec), 5.7%, 2
13:30 – United States – Producer Price Index ex Food & Energy (MoM) (Dec), 0.1%, 0.1%, 1
13:30 – United States – Producer Price Index ex Food & Energy (YoY) (Dec), 2.9%, 2
14:00 – United States – Net Long-Term TIC Flows (Nov), $27.3B, $4.8B, 1
14:00 – United States – Total Net TIC Flows (Nov), $-48.8B, 1
14:15 – United States – Capacity Utilization (Dec), 78.3%, 77.8%, 1
14:15 – United States – Industrial Production (MoM) (Dec), 0.5%, -0.2%, 2
15:00 – United States – NAHB Housing Market Index (Jan), 22, 21, 1
15:30 – United States – EIA Crude Oil Stocks change (Jan 13), 4.958M, 1
Jan 19:
13:30 – United States – Building Permits (MoM) (Dec), 0.680M, 0.681M, 1
13:30 – United States – Consumer Price Index (MoM) (Dec), 0%, 2
13:30 – United States – Consumer Price Index (YoY) (Dec), 3.4%, 3
13:30 – United States – Consumer Price Index Ex Food & Energy (MoM) (Dec), 0.2%, 2
13:30 – United States – Consumer Price Index Ex Food & Energy (YoY) (Dec), 2.2%, 3
13:30 – United States – Continuing Jobless Claims (Jan 7), 3.628M, 1
13:30 – Housing Starts (MoM) (Dec), 0.685M, 2
13:30 – United States – Initial Jobless Claims (Jan 14), 392K, 399K, 1
13:30 – Canada – Manufacturing Shipments (MoM) (Nov), 0.9%, -0.8%
15:00 – United States – Philadelphia Fed Manufacturing Survey (Jan), 11.2, 10.3, 2
Jan 20:
12:00 – Canada – Bank of Canada Consumer Price Index Core (MoM) (Dec), -0.2%, 0.1%, 2
12:00 – Canada – Bank of Canada Consumer Price Index Core (YoY) (Dec), 2.1%, 2
12:00 – Canada – Consumer Price Index (MoM) (Dec), -0.1%, 0.1%, 2
12:00 – Canada – Consumer Price Index (YoY) (Dec), 2.9%, 3
13:30 – Canada – Wholesale Sales (MoM) (Nov), 1.2%, 0.9%, 1
15:00 – United States – Existing Home Sales (MoM) (Dec), 4.69M, 4.42M, 1
15:00 – United States – Existing Home Sales Change (Dec), 4%
Historical:
Highest: 1.0842 CAD on 01 Nov 2009.
Average: 1.0147 CAD over this period.
Lowest: 0.9435 CAD on 26 Jul 2011.
Support: 1.0140 1.0105 1.0075
Resistance: 1.0210 1.0250 1.0320
Rule:
The Canadian Dollar moves in reaction to the US Dollar. Movements are small and easy to track and trade. The Canadian Dollar also responds to economic reports within Canada. It has little action against foreign currencies except during major moves or crisis.
The USD/CAD is the single biggest beneficiary of rising oil prices. Canada which is already the biggest exporter of oil to the US will experience a boost to its economy when oil price continue to increase. Therefore, if oil rises the Canadian dollar is likely to follow. Over the past years, the correlation between the Canadian dollar and oil prices has been approximately 81%.
Trading Ideas
1) if you believe the price of oil will keep rising, it might be a good strategy to buy the Canadian dollar because it’s 81% positive correlation to oil over the past years.
2) Since the USD/CAD pair tends to be highly correlated to oil, it might be a good idea to compare both Canadian dollar and oil charts in order to predict future moves, if for example oil breaks above an important resistance level and USD/CAD didn’t break resistance level yet, the USD/CAD is very likely to break above also. This illustrates how oil tends to lead the move ahead of USD/CAD.
Analysis and Recommendation:
The Canadian Dollar has remained steady and the only movement has been to offset moves in the USD. With the current downgrades of the EU countries by Standard and Poor’s and the decline in the euro, there might be some upside movement in the Canadian Dollar but it will be with the USD, so the pair will stay even. Crude Oil prices will settle now that the embargo has been put off and there seems to be some communication between Iran and the US and the rhetoric has been toned down.
There isn’t much room for the Twooie to move this week. Trading will be sideways or within a close. Monday the US markets are closed so there should not be much activity. There are several economic reports due this week and economists are forecasting all to be within the published ranges. Nothing of any great consequence is expected for this pair. The pair closed the week at 1.0232
Originally posted here
