Forex Market: USD/CAD daily trading outlook

Friday’s trade saw USD/CAD within the range of 1.2919-1.3045. The pair closed at 1.3001, edging up 0.21% on a daily basis. It has been the 28th gain in the past 54 trading days. The daily low has been the lowest level since October 19th 2015, when a low of 1.2897 was registered. In weekly terms, USD/CAD plunged 1.58% last week, while marking its 9th consecutive period of decline. USD/CAD has trimmed losses to 3.34% of its value so far during the current month, following a 3.10% slump in February.

At 7:57 GMT today USD/CAD was gaining 0.62% on the day to trade at 1.3086. The pair touched a daily high at 1.3092 at 7:42 GMT, overcoming the upper range breakout level (R4), and a daily low at 1.3020 during early Asian trade.

Canada’s dollar distanced from recent 5-month highs against its US counterpart on Friday, as crude oil futures came off highs unseen since early December 2015. March 18th marked the 32nd drop in oil prices out of the past 66 trading days. Oil futures for May delivery went up as high as $41.20 per barrel on March 18th, or the highest price level since December 4th, and closed at $39.44, tumbling 1.89% on the day. As of 8:03 GMT today the commodity was losing 0.73% on a daily basis to trade at $40.53 per barrel, after going down as low as $40.44 earlier.

On Monday USD/CAD trading may be influenced by the following macroeconomic report listed below.

Fundamentals

United States

Existing Home Sales

The index of existing home sales in the United States probably dropped 1.3% to a level of 5.40 million in February compared to January, according to the median estimate by experts. In January sales were 0.4% higher from a month ago to reach 5.47 million, or the highest level since July 2015, when a figure of 5.48 million was reported. Sales of new single-family houses rose 1% during the month, while sales of condos were down 4.7%. The median sales price dropped 3.2% in January.

In case the index decreased at a steeper monthly rate than anticipated, this would have a moderate bearish effect on the US dollar. The National Association of Realtors (NAR) is to release the official figure at 14:00 GMT.

Correlation with other Majors

Taking into account the week ended on March 18th and the daily closing levels of the major currency pairs, we come to the following conclusions in regard to the strength of relationship:

USD/CAD to USD/CHF (0.9743, or very strong)
USD/CAD to USD/JPY (0.8964, or very strong)
USD/CAD to GBP/USD (-0.8896, or very strong)
USD/CAD to EUR/USD (-0.9692, or very strong)
USD/CAD to AUD/USD (-0.9709, or very strong)
USD/CAD to NZD/USD (-0.9737, or very strong)

1. During the examined period USD/CAD moved almost equally in one and the same direction with USD/JPY and USD/CHF. This relationship has been the most pronounced between USD/CAD and USD/CHF.

2. USD/CAD moved almost equally in the opposite direction compared to GBP/USD, EUR/USD, AUD/USD and NZD/USD during the past week. This relationship has been the most pronounced between USD/CAD and NZD/USD.

Daily and Weekly Pivot Levels

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

R1 – 1.3013
R2 – 1.3024
R3 (range resistance) – 1.3036
R4 (range breakout) – 1.3071

S1 – 1.2989
S2 – 1.2978
S3 (range support) – 1.2966
S4 (range breakout) – 1.2932

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

Central Pivot Point – 1.3109
R1 – 1.3298
R2 – 1.3596
R3 – 1.3785

S1 – 1.2811
S2 – 1.2622
S3 – 1.2324