Yesterday’s trade saw USD/CAD within the range of 1.2912-1.3081. The pair closed at 1.2978, falling 0.73% on a daily basis. It has been the 30th drop in the past 62 trading days and also a third consecutive one. The daily low has been the lowest level since October 19th 2015, when a low of 1.2897 was registered. USD/CAD has depreciated 4.03% so far during the current month, following a 3.10% slump in February.
At 6:48 GMT today USD/CAD was edging up 0.09% on the day to trade at 1.2990. The pair touched a daily high at 1.3011 during mid-Asian trade, overshooting the daily R2 level, and a daily low at 1.2953 during the early phase of the Asian session.
On Thursday USD/CAD trading may be influenced by the following macroeconomic reports and other events 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 25th, probably remained at 265 000 for a second straight week, according to market expectations.
The 4-week moving average, an indicator lacking seasonal effects, was 259 750, marking an increase by 250 compared to the preceding weeks revised down average.
The business week, which ended on March 18th has been the 55th 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 fell further, this would have a moderate bullish effect on the US dollar.
The number of continuing jobless claims probably rose to the seasonally adjusted 2 210 000 during the business week ended on March 18th from 2 179 000 in the preceding week. The latter has been the lowest number since the business week ended on November 20th 2015, when 2 161 000 claims were reported. The figure also represented a decrease by 39 000 compared to the revised down number of claims reported in the week ended on March 4th. 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.
Chicago PMI
The Chicago Purchasing Managers Index (PMI) probably improved to a reading of 50.0 in March, according to market expectations, from 47.6 during the prior month. The latter has been the lowest reading since December 2015, when the PMI came in at 42.9. The index reflects business conditions in the regions 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), while a reading of 50.00 indicates no change in business conditions. In case the PMI improved more than forecast, this would have a moderate bullish effect on the US dollar. The ISM-Chicago Inc. will release the official reading of this key barometer at 13:45 GMT.
Fed Speakers
Following the rather dovish comments by the Fed Chair, Janet Yellen on March 29th, two more Federal Reserve officials are expected to take a statement today – the Fed President for Chicago, Charles Evans, at 13:30 GMT and the Fed President for New York, William Dudley, at 21:00 GMT. Their remarks could introduce moderate volatility in the Foreign Exchange Market as well as in other market segments.
Canada
Gross Domestic Product
Canadian real Gross Domestic Product (GDP) probably expanded 0.3% in January compared to a month ago, according to the median forecast by experts, following a 0.2% increase in the prior month.
In December, Canadian manufacturing sector expanded 1.1%, while wholesale trade grew 1.0%. On the other hand, the retail trade segment contracted 1.8%, mining, quarrying and oil and gas extraction shrank 0.7%, while output in utilities went down 2.6%, according to the report by Statistics Canada.
In case the monthly GDP growth came in line with expectations or accelerated even more in January, this would have a moderate bullish effect on the loonie. The official report is due out 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 – 1.2993
R2 – 1.3009
R3 (range resistance) – 1.3024
R4 (range breakout) – 1.3071
S1 – 1.2963
S2 – 1.2947
S3 (range support) – 1.2932
S4 (range breakout) – 1.2885
By using the traditional method of calculation, the weekly pivot levels for USD/CAD are presented as follows:
Central Pivot Point – 1.3188
R1 – 1.3385
R2 – 1.3494
R3 – 1.3691
S1 – 1.3079
S2 – 1.2882
S3 – 1.2773
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