Forex Market: USD/CAD daily trading outlook

Yesterday’s trade saw USD/CAD within the range of 1.3034-1.3220. The pair closed at 1.3209, soaring 1.25% on a daily basis. It has been the 30th gain in the past 57 trading days and also the steepest one since July 15th 2015, when it surged 1.49%. The daily high has been the highest level since March 16th, when a high of 1.3407 was registered. USD/CAD has eased its slump to 2.10% so far during the current month.

At 7:31 GMT today USD/CAD was edging up 0.33% on the day to trade at 1.3253. The pair touched a daily high at 1.3258 at 7:06 GMT, undershooting the range resistance level (R3), and a daily low at 1.3203 during early Asian trade.

Canada’s dollar distanced from recent highs against its US counterpart on Wednesday, as crude oil futures came off 3.5-month highs. March 23rd marked the 33rd drop in oil prices out of the past 69 trading days. Oil futures for May delivery went up as high as $41.34 per barrel on March 23rd and closed at $39.53, plummeting 4.63% on the day. As of 7:37 GMT today the commodity was losing 0.71% on a daily basis to trade at $39.25 per barrel, after going down as low as $39.23 earlier.

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

Fundamentals

United States

Initial, Continuing Jobless Claims

The number of people in the United States, who filed for unemployment assistance for the first time during the business week ended on March 18th, probably rose to 268 000, according to market expectations, from 265 000 reported in the preceding week.

The 4-week moving average, an indicator lacking seasonal effects, was 268 000, marking an increase by 750 compared to the preceding weeks revised down average.

The business week, which ended on March 11th has been the 54th consecutive week, when jobless claims stood below the 300 000 threshold, which suggested a healthy labor market. This has been the longest streak since 1973.

Initial jobless claims number is a short-term indicator, reflecting lay-offs in the country. In case the number of claims met expectations or increased further, this would have a moderate bearish effect on the US dollar.

The number of continuing jobless claims probably fell to the seasonally adjusted 2 230 000 during the business week ended on March 11th from 2 235 000 in the preceding week. The latter represented an increase by 8 000 compared to the revised up number of claims reported in the week ended on February 26th. This indicator reflects the actual number of people unemployed and currently receiving unemployment benefits, who filed for unemployment assistance at least two weeks ago.

The Department of Labor is to release the weekly report at 12:30 GMT.

Durable Goods Orders

The value of durable goods orders in the United States probably decreased 2.3% in February from a month ago, according to the median forecast by experts, following a revised down 4.7% surge in January. The latter has been the strongest monthly gain since July 2014, when orders value was reported to have increased 22.6%.

The value of shipments of manufactured durable goods, up in two of the past three months, rose 1.9% (or USD 4.6 billion) in January to reach USD 241.9 billion. The value of unfilled orders for manufactured durable goods, up in three of the past four months, rose 0.1% (or USD 0.6 billion) in January to reach USD 1,187.7 billion. At the same time, the value of inventories of manufactured durable goods, down in six of the past seven months, fell 0.1% (or USD 0.4 billion) during the period to USD 396.3 billion, according to data by the US Census Bureau.

Non-defense new orders for capital goods soared 21.6% (or USD 14.0 billion) in January to USD 79.2 billion, while defense new orders for capital goods went up 11.9% (or USD 1.1 billion) during the month to USD 10.2 billion.

The value of durable goods orders, excluding transportation, probably decreased 0.2% in February from a month ago, according to expectations, following a revised down 1.7% surge in January. The latter has been the largest monthly increase since June 2014, when core orders were up at a revised down 1.9%. Large ticket orders, such as automobiles for civil use or aircraft, are not present in the calculation, as their value may be in a wide range. This way the index provides a more reliable information in regard to orders for durable goods.

In case the general index dropped at a faster-than-projected pace, this would have a strong bearish effect on the US dollar, due to negative implications in regard to the wider gauge of production, factory orders. The US Census Bureau is scheduled to release the official report at 12:30 GMT.

Daily and Weekly Pivot Levels

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

R1 – 1.3226
R2 – 1.3243
R3 (range resistance) – 1.3260
R4 (range breakout) – 1.3311

S1 – 1.3192
S2 – 1.3175
S3 (range support) – 1.3158
S4 (range breakout) – 1.3107

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