Yesterday’s trade saw USD/CAD within the range of 1.1436-1.1502. The pair closed at 1.1482, gaining 0.32% on a daily basis.
At 8:15 GMT today USD/CAD was down 0.16% for the day to trade at 1.1457. The pair broke the first key daily support level and touched a daily low at 1.1436.
Fundamentals
United States
Retail sales
Retail sales in the United States probably increased 0.3% in November on a monthly basis, according to the median forecast by experts. In October retail sales recorded another 0.3% surge, which neutralized the 0.3% decrease in September. The latter has been the first drop in eight months. Sales in non-store retailers marked the largest increase, or 1.9% in October, followed by sales of sporting goods, books and at music stores (up 1.2%), food services and drinking places (up 0.9%) and sales in health and personal care stores (a 0.7% increase). On the other hand, sales in electronics and appliance stores were 1.6% lower, while those in gasoline stations dropped 1.5%, according to the report by the US Census Bureau.
Annualized retail sales climbed 4.1% in October, or at the slowest rate since March, following a 4.4% gain in September.
The report on retail sales reflects the dollar value of merchandise sold within the retail trade by taking a sampling of companies, operating in the sector of selling physical end products to consumers. The retail sales report encompasses both fixed point-of-sale businesses and non-store retailers, such as mail catalogs and vending machines. The Census Bureau, which is a part of the Department of Commerce, surveys about 5 000 companies of all sizes, from huge retailers such as Wal-Mart to independent small family firms.
US core retail sales, or retail sales ex autos, probably rose 0.1% in November compared to a month ago, following a 0.3% gain in October. This indicator removes large ticket prices and historical seasonality of automobile sales.
The retail sales index is considered as a coincident indicator, thus, it reflects the current state of the economy. It is also considered a pre-inflationary indicator, which investors can use in order to reassess the probability of an interest rate hike or cut by the Federal Reserve Bank. In addition, this indicator provides key information regarding consumer spending trends. Consumer expenditures, on the other hand, account for almost two-thirds of the US Gross Domestic Product. Therefore, a larger-than-expected increase in sales would certainly boost the US dollar. The official report is due out at 13:30 GMT.
Initial, Continuing jobless claims
The number of people in the United States, who filed for unemployment assistance for the first time during the week ended on December 5th, probably decreased to 295 000 from 297 000 in the prior week. The 4-week moving average, an indicator lacking seasonal effects, was 299 000, marking an increase of 4 750 from the previous weeks revised average. The previous weeks average was revised up by 250 from 294 000 to 294 250.
Initial jobless claims number is a short-term indicator, reflecting lay-offs in the country. In case the number of claims fell more than projected, this would have a bullish effect on the greenback.
The number of continuing jobless claims probably decreased to the seasonally adjusted 2 350 000 during the week ended on November 28th, from 2 362 000 in the previous week. The latter was an increase by 39 000 compared to the revised up number of claims, reported during the week ended on November 14th. This indicator represents the actual number of people unemployed and currently receiving unemployment benefits, who filed for unemployment assistance at least two weeks ago.
The Department of Labor is to release the weekly report at 13:30 GMT.
Canada
New Housing Price Index
Selling prices of new homes in Canada probably rose 0.1% in October compared to a month ago, following another 0.1% increase in September. If so, this would be the third consecutive month of gains. Prices climbed at a rate of 1.6% in September compared to September 2013, or the largest annual rate since April. The New Housing Price Index is a key indicator, reflecting the health of Canadian housing market. In case prices surged more than anticipated, this would be an indication of a strong demand and would, therefore, have a bullish effect on the loonie. Statistics Canada will release the official data at 13:30 GMT.
Pivot Points
According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.1473. In case USD/CAD manages to breach the first resistance level at 1.1511, it will probably continue up to test 1.1539. In case the second key resistance is broken, the pair will probably attempt to advance to 1.1577.
If USD/CAD manages to breach the first key support at 1.1445, it will probably continue to slide and test 1.1407. With this second key support broken, the movement to the downside will probably continue to 1.1379.
The mid-Pivot levels for today are as follows: M1 – 1.1393, M2 – 1.1426, M3 – 1.1459, M4 – 1.1492, M5 – 1.1525, M6 – 1.1558.
In weekly terms, the central pivot point is at 1.1408. The three key resistance levels are as follows: R1 – 1.1503, R2 – 1.1571, R3 – 1.1666. The three key support levels are: S1 – 1.1340, S2 – 1.1245, S3 – 1.1177.
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