Yesterday’s trade saw USD/CAD within the range of 1.3074-1.3219. The pair closed at 1.3142, going up 0.50% on a daily basis. It has been the 36th gain in the past 66 trading days and also a fourth consecutive one. The daily high has been the highest level since March 28th, when a high of 1.3286 was registered. USD/CAD has advanced 1.01% so far during the current month, following two straight months of decline.
At 7:06 GMT today USD/CAD was edging up 0.06% on the day to trade at 1.3150. The pair touched a daily high at 1.3151 at 6:50 GMT, undershooting the daily R1 level, and a daily low at 1.3123 during mid-Asian trading session.
Meanwhile, crude oil futures rebounded on April 5th. Tuesday marked the 39th gain in oil prices out of the past 77 trading days. Oil futures for May delivery went up as high as $36.77 per barrel on April 5th and closed at $36.69, surging 3.59% on the day. As of 7:17 GMT today the commodity was edging up 0.25% to trade at $36.78, after going up as high as $36.92 per barrel earlier.
On Wednesday USD/CAD trading may be influenced by the following macroeconomic reports as listed below.
Fundamentals
United States
FOMC Minutes
At 18:00 GMT the Federal Open Market Committee (FOMC) will release the minutes from its meeting on policy held on March 15th-16th. The minutes offer detailed insights on FOMC’s monetary policy stance. This release is closely examined by traders, as it may provide clues over interest rate decisions in the future. High volatility is usually present after the publication.
During her statement at the Economic Club of New York Federal Reserve Chair Janet Yellen used a rather dovish tone, saying that future policy adjustments need to be cautious, because of uncertainty regarding growth and inflation outlook as well as market turbulence. According to extracts from her speech on March 29th: “…this expectation of fading headwinds and a rising neutral rate is a key reason for the FOMC’s assessment that gradual increases in the federal funds rate over time will likely be appropriate. That said, this assessment is only a forecast. The future path of the federal funds rate is necessarily uncertain because economic activity and inflation will likely evolve in unexpected ways.”
“In particular, developments abroad imply that meeting our objectives for employment and inflation will likely require a somewhat lower path for the federal funds rate than was anticipated in December.”
“If economic conditions were to strengthen considerably more than currently expected, the FOMC could readily raise its target range for the federal funds rate to stabilize the economy. By contrast, if the expansion was to falter or if inflation was to remain stubbornly low, the FOMC would be able to provide only a modest degree of additional stimulus by cutting the federal funds rate back to near zero.”
Canada
Ivey PMI
Activity among purchasing managers in Canada probably increased at a faster pace in March, with the corresponding seasonally adjusted Purchasing Managers Index coming in at a value of 55.0. In February the gauge was reported at a level of 53.4. If expectations were met, March would be the third consecutive month of activity expansion.
This indicator is based on a survey sponsored by Richard Ivey School of Business and the Canadian Purchasing Management Association. It encompasses 175 respondents in both the public and the private sector, selected in accordance with their geographic location and activity, so that the entire economy is covered. Activity among purchasing managers is closely watched by market players, as managers usually have an early access to data regarding performance of their companies, which could be used as a leading indicator of overall economic activity. Readings above the key level of 50.0 are indicative of improvement in business conditions, while those below it suggest predominant pessimism (lower activity). In case the PMI came above market expectations, this would have a moderate-to-strong bullish effect on the Canadian dollar. The official index reading is due out at 14:00 GMT.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for USD/CAD are presented as follows:
R1 – 1.3155
R2 – 1.3169
R3 (range resistance) – 1.3182
R4 (range breakout) – 1.3222
S1 – 1.3129
S2 – 1.3115
S3 (range support) – 1.3102
S4 (range breakout) – 1.3062
By using the traditional method of calculation, the weekly pivot levels for USD/CAD are presented as follows:
Central Pivot Point – 1.3051
R1 – 1.3245
R2 – 1.3478
R3 – 1.3672
S1 – 1.2818
S2 – 1.2624
S3 – 1.2391
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