Forex Market: USD/CAD daily trading forecast

Written by Miroslav Marinov

Miroslav Marinov, a financial news editor at TradingPedia, is engaged with observing and reporting on the tendencies in the Foreign Exchange Market, as currently his focus is set on the major currencies of eight developed nations worldwide.

, | Updated: October 30, 2024

Yesterday’s trade saw USD/CAD within the range of 1.2732-1.2818. The pair closed at 1.2773, losing 0.34% on a daily basis.

At 8:50 GMT today USD/CAD was up 0.02% for the day to trade at 1.2776. The pair touched a daily high at 1.2793 during early Asian trade.

Fundamentals

United States

Housing Starts, Building Permits

The number of housing starts in the United States probably dropped to 1.049 million in February from the seasonally adjusted annual rate of 1.065 million during the prior month. Novembers figure has been influenced by a 5.4% drop in single-family homes. Single-family housing starts dropped 6.7% to 678 000 in January, offsetting a 12.1% increase in the multi-family segment. In January 2015 housing starts were 18.7% above the January 2014 level of 897 000. The January rate for units in buildings with five units or more was 381 000, according to the report by the US Census Bureau.

Housing Starts represent a gauge to measure residential units, on which construction has already begun, every month. A start in construction is defined as the foundation laying of a building and it encompasses residential housing primarily.

The number of building permits in the country probably increased to 1.065 million in February from a revised annual level of 1.053 million in January. If so, this would be the highest number of permits since October, when a level of 1.080 million was reported. Single-family authorizations in January were at a rate of 654 000, which represents a 3.1% drop compared to the revised December figure of 675 000. Authorizations of units in buildings with five units or more were at a rate of 372 000 in January.

Building permits are permits, issued in order to allow excavation. An increase in the number of building permits and housing starts usually occurs a few months after mortgage rates in the country have been reduced. Permits are not required in all regions of the United States. Building permits, as an indicator, provide information regarding demand in the US housing market. In case a higher-than-anticipated figure is reported, this will certainly support the US dollar. The official housing data is due out at 12:30 GMT.

Canada

Manufacturing Sales

Manufacturing sales in Canada probably dropped 1.2% in January compared to December, according to market expectations, following a 1.7% surge in December compared to November. The latter has been the fastest monthly rate of increase since September 2014, when shipments rose at a pace of 2.2%. The Monthly Survey of Manufacturing features statistical data regarding sales of finished goods, inventories, unfilled orders and new orders in Canadas sector of manufacturing. About 10 500 items and 27 000 companies are encompassed.

Manufacturing sales are considered as an indicator of demand in the future. An increase in the number of goods and unsold inventories suggests, that demand is not sufficient and vice versa. At the same time, a decrease in sales (shipments) speaks of weaker demand. Therefore, in case shipments decreased at a faster than projected pace, this might have a bearish impact on the Canadian dollar. Statistics Canada will release the manufacturing data at 12:30 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.2774. In case USD/CAD manages to breach the first resistance level at 1.2817, it will probably continue up to test 1.2860. In case the second key resistance is broken, the pair will probably attempt to advance to 1.2903.

If USD/CAD manages to breach the first key support at 1.2731, it will probably continue to slide and test 1.2688. With this second key support broken, the movement to the downside will probably continue to 1.2645.

The mid-Pivot levels for today are as follows: M1 – 1.2667, M2 – 1.2710, M3 – 1.2753, M4 – 1.2796, M5 – 1.2839, M6 – 1.2882.

In weekly terms, the central pivot point is at 1.2727. The three key resistance levels are as follows: R1 – 1.2882, R2 – 1.2981, R3 – 1.3136. The three key support levels are: S1 – 1.2628, S2 – 1.2473, S3 – 1.2374.