Forex Market: USD/CAD daily trading forecast

Yesterday’s trade saw USD/CAD within the range of 1.1288-1.1370. The pair closed at 1.1300, losing 0.36% on a daily basis.

At 7:30 GMT today USD/CAD was up 0.06% for the day to trade at 1.1311. The pair touched a daily high at 1.1314 during early Asian trade.

Fundamentals

Canada

The annualized consumer inflation in Canada probably accelerated to 2.1% in October, according to market expectations, from 2.0% in September. If so, this would match the rate reported in August and July. Shelter costs climbed at an annualized rate of 2.7% during September, following a 2.8% gain in August, supported by a 16.2% surge in natural gas prices. Food prices rose 2.7% in September compared to the same month a year ago, after another 2.2% gain in August. Consumers also paid more for homeowners home and mortgage insurance, property taxes and electricity in September, while the mortgage interest cost index dropped year-over-year, according to the report by the Statistics Canada.

In monthly terms, the Consumer Price Index probably fell 0.2% in October, after gaining 0.1% in September.

Key categories in Canadian CPI basket are Shelter (accounting for 27.5% of the total weight) and Transportation (19.3%). Other categories include Food (with a 16.1% share), Household Operations, Furnishings and Equipment (11.8%), Recreation, Education and Reading (11.8%), Clothing and Footwear (5.7%), Health and Personal Care (5%), while Alcoholic Beverages and Tobacco Products comprise the remaining 3%.

Bank of Canadas (BoC) annualized Core CPI, which excludes prices of fruits, vegetables, gasoline, fuel oil, natural gas, mortgages, intercity transportation, and tobacco products, probably rose to 2.2% in October. In September annualized core inflation was reported at 2.1%, or the same as in August and also the highest level since April 2012. If market expectations were met, this would be the highest annual rate of core inflation since February 2012, when it was 2.3%. This is the key measure of inflation, on which the central bank bases its decisions regarding monetary policy. In case the Core CPI increased more than projected, but still remained within BoC inflation range target (1-3%), this would support demand for the loonie, as Canadian dollar is also known. The official CPI report by Statistics Canada is due out at 13:30 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.1319. In case USD/CAD manages to breach the first resistance level at 1.1351, it will probably continue up to test 1.1401. In case the second key resistance is broken, the pair will probably attempt to advance to 1.1433.

If USD/CAD manages to breach the first key support at 1.1269, it will probably continue to slide and test 1.1237. With this second key support broken, the movement to the downside will probably continue to 1.1187.

The mid-Pivot levels for today are as follows: M1 – 1.1212, M2 – 1.1253, M3 – 1.1294, M4 – 1.1335, M5 – 1.1376, M6 – 1.1417.

In weekly terms, the central pivot point is at 1.1317. The three key resistance levels are as follows: R1 – 1.1373, R2 – 1.1459, R3 – 1.1515. The three key support levels are: S1 – 1.1231, S2 – 1.1175, S3 – 1.1089.