Yesterday’s trade saw USD/CAD within the range of 1.3946-1.4124. The pair closed at 1.4037, losing 0.40% on a daily basis. It has been the 6th drop in the past 18 trading days and also a third consecutive one. The daily low has been the lowest level since January 5th, when USD/CAD went down as low as 1.3893.
At 9:24 GMT today USD/CAD was edging down 0.11% for the day to trade at 1.4021. The pair touched a daily low at 1.3969 at 8:05 GMT and a daily high at 1.4055 during mid-Asian trading session.
Canada’s dollar remained supported, as crude oil prices surged for a third straight day on Thursday. Oil futures for March delivery went up as high as $34.82 per barrel yesterday, or the highest level since January 6th, and closed at a level of $33.53 to mark their 15th gain in the past 30 trading days. As of 9:33 GMT today the commodity was down 0.12% on a daily basis to trade at $33.49 per barrel, after going down as low as $33.31 earlier. Oil has eased its slump to 9.65% so far during the current month.
On Friday USD/CAD trading may be influenced by the following macroeconomic reports as listed below.
Fundamentals
United States
Gross Domestic Product – preliminary estimate
The preliminary estimate of the US Gross Domestic Product probably pointed to an annualized rate of growth of 0.8% in the fourth quarter of the year, according to market expectations. The final GDP estimate for Q3, reported on December 22nd, pointed to an annual growth of 2.0%, a revision down compared to the second GDP estimate.
Consumer spending in the country rose 3.0% year-on-year in the third quarter of 2015, unchanged compared to the second estimate, and following a 3.6% expansion in the previous quarter.
Fixed investment rose at a final 3.7% year-on-year in Q3, down from a 3.4% expansion in the second estimate, as non-residential investment grew 2.6% and residential investment rose 8.2%. Fixed investment was 5.2% higher in Q2 2015 compared to the same period a year ago.
Government spending and investment registered a 1.8% expansion in Q3, according to final data, up from a 1.7% increase in the second estimate, but slowing down from a 2.6% growth in Q2.
US exports rose at an annualized rate of 0.7% in Q3, slowing down from a 0.9% growth in the second estimate, following a 5.2% growth in Q2. At the same time, US imports climbed 2.3% year-on-year in the third quarter, accelerating from a 2.1% increase in the second estimate, but down from a 3.0% gain in the second quarter, according to data by the US Department of Commerce.
In case US economic growth slowed down more than anticipated in Q4, this would have a strong bearish effect on the US dollar. The preliminary report is due out at 13:30 GMT.
Chicago Manufacturing Survey
The Chicago Purchasing Managers Index (PMI) probably improved to a reading of 45.0 in January, according to market expectations, from 42.9 during the prior month. The latter has been the lowest reading since June 2009, when the PMI came in at 39.9. The index reflects business conditions in the regions manufacturing sector and is interrelated with the Manufacturing Index, published by the Institute for Supply Management (ISM). A reading below the key level of 50.0 is indicative of pessimism (contraction in manufacturing activity). In case the PMI improved more than forecast, this would have a moderate bullish effect on the US dollar. The ISM-Chicago Inc. will release the official reading of this key barometer at 14:45 GMT.
Reuters/Michigan Consumer Sentiment Index – final reading
The monthly survey by Thomson Reuters and the University of Michigan may show that consumer confidence in the United States improved in January. The final reading of the corresponding index, which usually comes out two weeks after the preliminary data, probably came in at 93.0, slightly down from a preliminary value of 93.3. If market expectations were met, this would be the highest level since July 2015, when the gauge of sentiment was reported at a final 93.1. In December the gauge of confidence came in at a final reading of 92.6, improving from a preliminary value of 91.8. The survey encompasses about 500 respondents throughout the country. The index is comprised by two major components, a gauge of current conditions and a gauge of expectations. The current conditions index is based on the answers to two standard questions, while the index of expectations is based on three standard questions. All five questions have an equal weight in determining the value of the overall index.
According to preliminary data, the sub-index of current economic conditions, which measures US consumers’ views of their personal finances, went down to 105.1 in January from a final reading of 108.1 in December. The sub-index of consumer expectations improved to a flash reading of 85.7 in January from a final value of 82.7 in December.
Respondents in the survey expect that the rate of inflation in the next year will probably slow down to 2.4% from 2.6%, as expected in the December survey.
In case the final value of the consumer sentiment index confirmed or even came above the preliminary reading, this would have a moderate bullish effect on the dollar. The final reading is due out at 15:00 GMT.
Canada
Producer prices
Prices of industrial products in Canada probably dropped for a fifth consecutive month in December, going down at a monthly rate of 0.3%, according to expectations. In November prices were down 0.2%. This index measures the change in prices of industrial goods, sold by manufacturers in the country. It is also used as an indicator of commodity inflation. In case a larger-than-anticipated decrease in prices is reported, this would have a limited bearish effect on the local dollar, as the latter tends to be sensitive to changes in commodity prices. Statistics Canada is to release the official data at 13:30 GMT.
Gross Domestic Product
Canadian real Gross Domestic Product (GDP) probably expanded 0.3% in November compared to a month ago, according to the median forecast by experts, after remaining flat in October. If expectations were met, Novembers growth rate would be the fastest one since July 2015, when the GDP grew 0.3%.
In October, the sector of mining, quarrying, and oil and gas extraction grew 0.7%, while the public sector expanded 0.2%. At the same time, Canadian manufacturing sector shrank 0.3%, output in utilities declined 1.4%, while the retail trade segment contracted 0.4% during the month, according to the report by Statistics Canada.
In case the monthly GDP growth came in line with expectations or accelerated even more in November, this would have a moderate bullish effect on the loonie. The official report is due out at 13:30 GMT.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for USD/CAD are presented as follows:
R1 – 1.4053
R2 – 1.4070
R3 (range resistance) – 1.4086
R4 (range breakout) – 1.4135
S1 – 1.4021
S2 – 1.4004
S3 (range support) – 1.3988
S4 (range breakout) – 1.3939
By using the traditional method of calculation, the weekly pivot levels for USD/CAD are presented as follows:
Central Pivot Point – 1.4306
R1 – 1.4502
R2 – 1.4886
R3 – 1.5082
S1 – 1.3922
S2 – 1.3726
S3 – 1.3342
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
