Forex Market: USD/CAD daily trading outlook

Yesterday’s trade saw USD/CAD within the range of 1.3383-1.3554. The pair closed at 1.3428, falling 0.83% on a daily basis. It has been the 19th drop in the past 41 trading days and also the steepest one since February 25th, when the pair fell 1.25%. In addition, the daily low has been the lowest level since December 7th 2015, when a low of 1.3362 was registered.

At 7:41 GMT today USD/CAD was inching up 0.04% for the day to trade at 1.3434. The pair touched a daily high at 1.3437 at 7:21 GMT, undershooting the daily R1 level, and a daily low at 1.3407 during the early phase of the Asian trading session.

Canada’s dollar advanced to fresh highs unseen in over 2.5 months against its US counterpart, as crude oil futures surged to highs unseen since January 28th on Tuesday. March 1st marked the 27th gain in oil prices out of the past 53 trading days and also the second consecutive one. Oil futures for April delivery went up as high as $34.76 per barrel on March 1st and closed at $33.88. As of 7:49 GMT today the commodity was gaining 0.53% on a daily basis to trade at $34.06 per barrel, after going up as high as $34.28 earlier. Oil has risen 0.83% so far during the current month, following a 0.39% gain in February.

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

Fundamentals

United States

Change in Employment by ADP

Employers in the US non-farm private sector probably added 185 000 new jobs during February, according to the median estimate by experts, following 205 000 new positions added in January. If expectations were met, this would be the slowest gain in jobs since October 2015, when 182 000 positions were added. The employment report by Automated Data Processing Inc. (ADP) is based on data that encompasses 400 000 – 500 000 companies employing over 24 million people, working in the 19 major sectors of the economy. The ADP employment change indicator is calculated in accordance with the same methodology, which the Bureau of Labor Statistics (BLS) uses. Published two days ahead of the governments employment statistics, this report is used by traders as a reliable predictor of the official non-farm payrolls data. Creation of jobs has a direct link to consumer spending, while the latter is a major driving force behind the US economic growth. However, in case new jobs growth came below expectations, this would have a moderate-to-strong bearish effect on the US dollar. The official figure is scheduled to be released at 13:15 GMT.

”Beige Book” report

At 19:00 GMT the Federal Reserve is to release its ”Beige Book” report. It is published eight times during the year. Each of the banks in the 12 Federal Reserve Districts gathers data in regard to current economic situation in the country on the basis of interviews with key business contacts, economists, market experts, and other sources. In case the Beige Book presents an optimistic economic outlook, this will usually support the greenback, while a pessimistic view will have a bearish effect on the currency.

Daily and Weekly Pivot Levels

By employing the Camarilla calculation method, the daily pivot levels for USD/CAD are presented as follows:

R1 – 1.3444
R2 – 1.3459
R3 (range resistance) – 1.3475
R4 (range breakout) – 1.3522

S1 – 1.3412
S2 – 1.3397
S3 (range support) – 1.3381
S4 (range breakout) – 1.3334

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