Forex Market: USD/CAD daily trading forecast

Yesterday’s trade saw USD/CAD within the range of 1.2060-1.2395. The daily high has also been the highest level since April 23rd 2009. The pair closed at 1.2341, gaining 1.87% on a daily basis.

At 8:34 GMT today USD/CAD was up 0.26% for the day to trade at 1.2373. The pair broke all three key weekly resistance levels and touched a daily high at 1.2375 at 8:30 GMT.

Fundamentals

United States

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 January 16th, probably decreased to 300 000 from 316 000 in the prior week. The latter has been the highest level since the week ended on September 5th. The 4-week moving average, an indicator lacking seasonal effects, was 298 000, marking an increase of 6 750 from the previous weeks revised up average of 291 250.

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 fell to the seasonally adjusted 2 410 000 during the week ended on January 9th, from 2 424 000 in the previous week. The latter was a decrease by 51 000 compared to the revised up number of claims, reported during the week ended on January 2nd. 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.

Bank of Canada unexpectedly cuts its benchmark

Yesterday Bank of Canada lowered its benchmark interest rate by 0.25% to 0.75%, after it has not been changed since September 2010. The last time a cut was introduced was in April 2009.

“They are taking pre-emptive steps,” Thomas Costerg, an economist at Standard Chartered Bank, said in a phone interview from New York, cited by Bloomberg. “If oil prices remain under pressure, you could potentially see further cuts. This was not expected, and it’s going to put pressure on the loonie.”

The central bank also revised down its economic growth projection for the first half of 2015, saying economy will probably grow at an annualized rate of 1.5%. In October the banks forecast pointed to an annualized growth of 2.4%. In addition, annual inflation rate in the country will probably slow down to 0.3% during the second quarter of the year, which stands outside of the inflation target range of 1% to 3%.

The yield on the nations benchmark 10-year government bonds fell to as low as 1.365%, before trading at 1.43%.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.2265. In case USD/CAD manages to breach the first resistance level at 1.2471, it will probably continue up to test 1.2600. In case the second key resistance is broken, the pair will probably attempt to advance to 1.2806.

If USD/CAD manages to breach the first key support at 1.2136, it will probably continue to slide and test 1.1930. With this second key support broken, the movement to the downside will probably continue to 1.1801.

The mid-Pivot levels for today are as follows: M1 – 1.1866, M2 – 1.2033, M3 – 1.2201, M4 – 1.2368, M5 – 1.2536, M6 – 1.2703.

In weekly terms, the central pivot point is at 1.1943. The three key resistance levels are as follows: R1 – 1.2088, R2 – 1.2190, R3 – 1.2335. The three key support levels are: S1 – 1.1841, S2 – 1.1696, S3 – 1.1594.