Yesterday’s trade saw USD/CAD within the range of 1.3879-1.4017. The pair closed at 1.3918, inching down 0.05% on a daily basis. It has been the 12th drop in the past 28 trading days. In addition, the daily high has been the highest level since February 3rd, when a high of 1.4103 was registered.
At 9:05 GMT today USD/CAD was edging up 0.08% for the day to trade at 1.3929. The pair touched a daily low at 1.3890 at 4:00 GMT, overshooting the daily S2 level, and a daily high at 1.3940 during the early phase of the Asian trading session.
Canada’s dollar continued to lose ground against its US counterpart, as crude oil fell for a sixth straight day on Thursday. February 11th also marked the 23rd drop in oil prices out of the past 40 trading days. Oil futures for March delivery went down as low as $26.05 per barrel on February 11th, or the lowest price level since May 2003, and closed at a level of $27.31. As of 9:12 GMT today the commodity was inching up 0.33% on a daily basis to trade at $27.40 per barrel, after going up as high as $27.76 earlier. Oil has eased its slump to 18.55% 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
Retail Sales
Retail sales in the United States probably increased 0.1% in January on a monthly basis, according to the median forecast by experts. In December sales unexpectedly fell 0.1%, following five consecutive months of increases.
Among the 13 major categories, 6 registered growth, 6 showed declines and 1 showed no change. In December, an increase in sales was reported for sporting goods, hobby, book & music stores (up 0.9% month-over-month), furniture stores (up 0.9%), food and services drinking places (up 0.8%), building material and garden equipment and supplies dealers (up 0.7%), non-store retailers (up 0.3%) and health and personal care stores (up 0.2% from a month ago).
On the other hand, in December, retail sales dropped at miscellaneous store retailers (down 2% month-over-month), gasoline stations (down 1.1%), general merchandise stores (down 1%), clothing stores (down 0.9%), food and beverages stores (down 0.3%) and electronic appliance stores (down 0.2% from a month ago).
Sales at motor vehicle & parts dealers remained unchanged during the same month, according to the report by the US Census Bureau.
Annualized retail sales surged 2.2% in December, or the most since September 2015, following a revised up 1.6% climb in November.
US core retail sales, or retail sales ex autos, probably remained flat in January compared to a month ago, following a 0.1% dip in December. The latter has been the first drop in the past three months. This indicator removes large ticket prices and historical seasonality of automobile sales.
In case the general index came above market expectations in January, this would have a strong bullish effect on the US dollar. The official report is due out at 13:30 GMT.
Import and Export Prices
Prices of imported goods in the United States probably fell for an 8th consecutive month in January, going down at a monthly rate of 1.2%, according to market expectations. In December import prices were again 1.2% lower from a month ago, driven by a 9.5% slump in fuel prices. Non-fuel prices were down 0.3% during the same month. In annual terms, prices were 8.2% lower in December, which has been the 17th consecutive month of decline. Generally, lower import prices of goods suggest lower rates of consumer inflation.
Prices of exported goods from the United States probably decreased for an 8th consecutive month in January, falling at a monthly rate of 0.6%. In December export prices were 1.1% lower from a month ago, as agricultural export prices fell 1.0%, while prices of non-agricultural goods dropped 1.1%. In annual terms, export prices slumped 6.5% in December, or for a 16th month in a row. Lower prices of exported goods generally bolster demand abroad, and as US trade accounts for 20% of international trade relations, this also tends to be dollar positive.
The Department of Labor is expected to release the official numbers at 13:30 GMT.
Reuters/Michigan Consumer Sentiment Index – preliminary reading
The monthly survey by Thomson Reuters and the University of Michigan may show that consumer confidence in the United States improved in February. The preliminary reading of the corresponding index, which usually comes out two weeks ahead of the final data, probably rose to 93.0 during the current month from a final reading of 92.0 in January. The latter came well below the preliminary reading of 93.3, which was reported on January 15th. If expectations were met, Februarys reading would be the highest since July 2015, when a level of 93.1 was reported.
The sub-index of current economic conditions advanced to a final reading of 106.4 from a preliminary 105.1 in January, but down from a final 108.1 in December.
The sub-index of consumer expectations came in at a reading of 82.7, down from a preliminary value of 85.7 in January, but matching the final reading registered in December.
Participants in the January survey expected that the rate of inflation will be at 2.5% during the next year, or higher compared to the preliminary release (2.4%), but down from a rate of 2.6% as expected in December.
In case the gauge of consumer sentiment increased at a steeper pace than projected in February, this would have a moderate-to-strong bullish effect on the greenback. The preliminary reading is due out at 15:00 GMT.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for USD/CAD are presented as follows:
R1 – 1.3931
R2 – 1.3943
R3 (range resistance) – 1.3956
R4 (range breakout) – 1.3994
S1 – 1.3905
S2 – 1.3893
S3 (range support) – 1.3880
S4 (range breakout) – 1.3842
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
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