Friday’s trade saw USD/CAD within the range of 1.3501-1.3566. The pair closed at 1.3513, shedding 0.13% on a daily basis. It has been the 18th drop in the past 39 trading days and also a third consecutive one. In addition, the daily low has been the lowest level since December 8th 2015, when a low of 1.3493 was registered. In weekly terms, USD/CAD fell 1.84% last week, or the most since the week ended on January 24th, while also marking its sixth consecutive week of decline. USD/CAD has slumped 3.22% so far during the current month, following three straight months of gains. In January the pair added 0.95% to its value.
At 7:42 GMT today USD/CAD was edging down 0.24% for the day to trade at 1.3520. The pair touched a daily low at 1.3516 during early Asian trade, undershooting the daily S1 level, and a daily high at 1.3558 again during the early phase of the Asian trading session.
Canada’s dollar advanced to fresh highs unseen in 2.5 months against its US counterpart, as crude oil futures touched their highest level since January 5th on Friday. February 26th marked the 26th drop in oil prices out of the past 51 trading days. Oil futures for April delivery went down as low as $32.64 per barrel on February 26th and closed at $32.78. As of 7:49 GMT today the commodity was gaining 0.92% on a daily basis to trade at $32.88 per barrel, after going up as high as $33.11 earlier. Oil has increased its slump to 2.26% so far during the current month.
On Monday USD/CAD trading may be influenced by the following macroeconomic reports as listed below.
Fundamentals
United States
Chicago Manufacturing Survey
The Chicago Purchasing Managers’ Index (PMI) probably slowed down to a reading of 54.0 in February, according to market expectations, from 55.6 during the prior month. The latter has been the highest reading since October 2015, when the PMI came in at 56.2. The index reflects business conditions in the region’s manufacturing sector and is interrelated with the Manufacturing Index, published by the Institute for Supply Management (ISM). A reading above the key level of 50.0 is indicative of optimism (expansion in manufacturing activity). In case the PMI slowed down more than forecast, this would have a moderate bearish effect on the US dollar. The ISM-Chicago Inc. will release the official reading of this key barometer at 14:45 GMT.
Pending Home Sales
The index of pending home sales in the United States probably rose 0.5% in January, according to the median estimate by experts. If so, this would be the sharpest monthly increase since July 2015, when sales went up 0.5% as well. In December pending home sales rose 0.1%.
In annual terms, the index of pending home sales advanced 4.2% in December, which has been a 16th consecutive month of increase and also the steepest rate since August 2015, when sales climbed 6.1%.
In case pending home sales increased at a faster pace than anticipated, this would have a moderate bullish effect on the US dollar. The National Association of Realtor’s (NAR) will report on the official index performance at 15:00 GMT.
Canada
Producer Prices
Prices of industrial products in Canada probably dropped for a sixth consecutive month in January, going down at a monthly rate of 0.3%, according to expectations. In December 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.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for USD/CAD are presented as follows:
R1 – 1.3519
R2 – 1.3526
R3 (range resistance) – 1.3532
R4 (range breakout) – 1.3549
S1 – 1.3507
S2 – 1.3500
S3 (range support) – 1.3494
S4 (range breakout) – 1.3477
By using the traditional method of calculation, the weekly pivot levels for USD/CAD are presented as follows:
Central Pivot Point – 1.3625
R1 – 1.3749
R2 – 1.3985
R3 – 1.4109
S1 – 1.3389
S2 – 1.3265
S3 – 1.3029
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