Forex Market: USD/CAD daily trading outlook

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 1.3969-1.4109. The pair closed at 1.4068, rising 0.51% on a daily basis, while marking its third consecutive trading day of gains. The daily high has been the highest level since August 22nd 2003, when a high of 1.4166 was registered.

At 8:39 GMT today USD/CAD was gaining 0.47% for the day to trade at 1.4143. The pair touched a daily high at 1.4146 at 10:38 GMT, marking the new highest level since August 22nd 2003, and a daily low at 1.4065 during the early hours of Asian trading session. Resistance may be encountered at August 22nd 2003 high (1.4166) and after that – at the high from July 23rd 2003 (1.4196). Support, on the other hand, may be received at the hourly 21-period EMA (1.4092) and after that – in the area around the current daily low (1.4065).

On Thursday USD/CAD trading may be influenced by the following macroeconomic reports as listed below.

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 business week ended on January 1st, probably decreased to 275 000, according to market expectations, from 287 000 reported in the preceding week. The latter has been the highest number of claims since the business week ended on July 3rd, when a figure of 297 000 was reported.

The 4-week moving average, an indicator lacking seasonal effects, was 277 000, marking an increase by 4 500 compared to the preceding week’s unrevised average.

The business week, which ended on December 25th has been the 43rd consecutive week, when jobless claims stood below the 300 000 threshold, which implied a healthy labor market.

Initial jobless claims number is a short-term indicator, reflecting lay-offs in the country. In case the number of claims met expectations or dropped further, this would have a moderate bullish effect on the US dollar.

The number of continuing jobless claims probably dropped to the seasonally adjusted 2 193 000 during the business week ended on December 25th from 2 198 000 in the preceding week. The latter represented an increase by 3 000 compared to the unrevised number of claims reported in the week ended on December 11th. This indicator reflects 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

BoC Poloz Speech

At 13:10 GMT Bank of Canada Governor Stephen Poloz is expected to take a statement. High volatility of the currency pairs containing the loonie is usually present during such events.

Ivey PMI

Activity among purchasing managers in Canada probably slowed down in December, with the corresponding seasonally adjusted Purchasing Managers’ Index coming in at a value of 56.7. If so, December would be the ninth consecutive month, when the index inhabited the area above 50.0. In November the gauge was reported at a level of 63.6, or the highest since February 2012, when it came in at 66.5. This indicator is based on a survey sponsored by Richard Ivey School of Business and Canadian Purchasing Management Association. It encompasses 175 respondents in both the public and the private sector, selected in accordance with their geographic location and activity, so that the entire economy is covered. Activity among purchasing managers is closely watched by market players, as managers usually have an early access to data regarding performance of their companies, which could be used as a leading indicator of overall economic activity. Readings at the key level of 50.0 are indicative of no change in business conditions, while those above it suggest optimism (expanding activity). In case the PMI demonstrated a larger-than-expected slowdown in December, this would have a moderate-to-strong bearish effect on the Canadian dollar. The official index reading is due out at 15:00 GMT.