Forex Market: USD/CAD daily trading outlook

Yesterday’s trade saw USD/CAD within the range of 1.3816-1.4000. The pair closed at 1.3924, rising 0.43% on a daily basis. It has been the 16th gain in the past 27 trading days and also the sharpest one since February 5th. In addition, the daily high has been the highest level since February 3rd, when a high of 1.4103 was registered.

At 9:38 GMT today USD/CAD was gaining 0.31% for the day to trade at 1.3967. The pair touched a daily high at 1.4001 at 9:16 GMT, making a higher-high test of the high from February 10th, and a daily low at 1.3883 during the early phase of the Asian trade.

Canada’s dollar continued to lose ground against its US counterpart, as crude oil fell for a fifth straight day on Wednesday. February 10th also marked the 22nd drop in oil prices out of the past 39 trading days. Oil futures for March delivery went down as low as $27.24 per barrel on February 10th, or the lowest level since January 20th, and closed at a level of $27.35. As of 9:46 GMT today the commodity was losing 2.41% on a daily basis to trade at $26.69 per barrel, after going down as low as $26.52 earlier. Oil has expanded its slump to 20.60% so far during the current month.

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 February 5th, probably fell to 281 000, according to market expectations, from 285 000 reported in the preceding week.

The 4-week moving average, an indicator lacking seasonal effects, was 284 750, marking an increase by 2 000 compared to the preceding weeks revised down average.

The business week, which ended on January 29th has been the 47th 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 fell further, this would have a moderate bullish effect on the US dollar.

The number of continuing jobless claims probably fell to the seasonally adjusted 2 250 000 during the business week ended on January 22nd from 2 255 000 in the preceding week. The latter represented a decrease by 18 000 compared to the revised up number of claims reported in the week ended on January 15th. 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

New Housing Price Index

Selling prices of new homes in Canada probably rose for a ninth straight month in December, up 0.2%, according to market expectations. In November compared to October prices went up another 0.2%. Home values climbed at a rate of 1.6% in November compared to the same month a year ago, following 1.3% year-on-year increases, reported in the preceding four months. The New Housing Price Index is a key indicator, reflecting the health of the Canadian housing market. In case prices surged more than anticipated, this would be an indication of a strong demand and would, therefore, have a limited bullish effect on the loonie. Statistics Canada will release the official report 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 – 1.3941
R2 – 1.3958
R3 (range resistance) – 1.3975
R4 (range breakout) – 1.4025

S1 – 1.3907
S2 – 1.3890
S3 (range support) – 1.3873
S4 (range breakout) – 1.3823

By using the traditional method of calculation, the weekly pivot levels for USD/CAD are presented as follows:

Central Pivot Point – 1.3884
R1 – 1.4134
R2 – 1.4352
R3 – 1.4602

S1 – 1.3666
S2 – 1.3416
S3 – 1.3198