Forex Market: USD/CAD daily trading outlook

Yesterday’s trade saw USD/CAD within the range of 1.2992-1.3102. The pair closed at 1.3094, rising 0.71% on a daily basis. It has been the 29th gain in the past 55 trading days and also a second consecutive one. The daily high has been the highest level since March 17th, when a high of 1.3134 was registered. USD/CAD has increased its slump to 3.47% so far during the current month.

At 7:36 GMT today USD/CAD was edging down 0.15% on the day to trade at 1.3075. The pair touched a daily low at 1.3054 at 6:30 GMT, overshooting the range support level (S3), and a daily high at 1.3100 during early Asian trade.

Canada’s dollar regained ground against its US counterpart on Monday, as crude oil futures reached fresh highs unseen since early December 2015. March 21st marked the 35th gain in oil prices out of the past 67 trading days. Oil futures for May delivery went up as high as $41.77 per barrel on March 21st, or the highest price level since December 4th, and closed at $41.56, advancing 5.31% on the day. As of 7:43 GMT today the commodity was losing 0.02% on a daily basis to trade at $41.55 per barrel, after going down as low as $41.36 earlier.

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

Fundamentals

United States

Manufacturing PMI by Markit – preliminary reading

Manufacturing activity in the United States probably increased at a faster rate in March, with the corresponding preliminary Purchasing Managers Index coming in at a reading of 51.8, according to market expectations. In February the final seasonally adjusted PMI stood at 51.3, improving from a preliminary 51.0. It has been the lowest PMI level since October 2012, when the index was reported at a final 51.0.

According to Markits statement: ”The latest increase in production was only modest and the weakest recorded since October 2013. Reports from survey respondents suggested that softer new business growth and uncertainty about the economic outlook had acted as a brake on production at their plants.”

”Volumes of new work increased moderately in February, with the pace of expansion easing to one of the slowest recorded over the past three-and-ahalf years. Anecdotal evidence suggested that clients had delayed spending decisions in February amid caution about the business outlook. Additionally, there were further reports citing weak demand from energy sector clients. Subdued export demand also weighed on new business levels in February. The latest survey pointed to the most marked decline in new orders from abroad since April 2015, which manufacturers partly linked to competitive pressures from the strong dollar.”

”Softer overall new business growth contributed to a renewed drop in backlogs of work across the manufacturing sector in February. At the same time, employment growth moderated for the second successive month. The latest increase in payroll numbers was only modest, and the weakest recorded since September 2015. A number of firms suggested that the uncertain business outlook had led to more cautious staff hiring patterns at their plants.”

Values above the key level of 50.0 indicate optimism (expanding activity). In case the flash manufacturing PMI showed a better-than-anticipated performance, this would have a moderate bullish effect on the US dollar. The preliminary PMI reading by Markit Economics is due out at 13:45 GMT.

Daily and Weekly Pivot Levels

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

R1 – 1.3104
R2 – 1.3114
R3 (range resistance) – 1.3125
R4 (range breakout) – 1.3155

S1 – 1.3084
S2 – 1.3074
S3 (range support) – 1.3064
S4 (range breakout) – 1.3034

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