Yesterday’s trade saw USD/CAD within the range of 1.2744-1.2828. The pair closed at 1.2818, edging up 0.36% on a daily basis. It has been the 38th gain in the past 72 trading days. USD/CAD has trimmed its slump to 0.95% so far during the current month, following two consecutive months of decline.
At 6:54 GMT today USD/CAD was gaining 0.49% on the day to trade at 1.2881. The pair touched a daily high at 1.2889 at 6:41 GMT, or the highest level since April 12th, and a daily low at 1.2809 during early Asian trade.
Canada’s dollar distanced from the recent nine-month highs against its US counterpart, as crude oil futures came off highs unseen since November 2015 on April 13th. Wednesday marked the 44th gain in oil prices out of the past 83 trading days and also a fourth consecutive one. Oil futures for May delivery went up as high as $42.41 per barrel on April 13th, or the highest price level since November 30th, and closed at $41.71, inching up 0.02% on the day. As of 7:02 GMT today the commodity was losing 1.80% to trade at $40.96, after going down as low as $40.94 per barrel earlier.
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 April 8th, probably increased to 270 000, according to market expectations, from 267 000 in the preceding week.
The 4-week moving average, an indicator lacking seasonal effects, was 266 750, marking an increase by 3 500 compared to the preceding weeks unrevised average.
The business week, which ended on April 1st has been the 57th 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 dropped to the seasonally adjusted 2 183 000 during the business week ended on April 1st from 2 191 000 in the preceding week. The latter has been the highest number of claims since the business week ended on March 4th, when a revised down 2 218 000 claims were reported. The figure also represented an increase by 19 000 compared to the revised down number of claims reported in the week ended on March 18th. 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.
Consumer inflation
The annualized consumer inflation in the United States probably accelerated to 1.2% in March, according to market expectations, from 1.0% in February. In monthly terms, the Consumer Price Index (CPI) probably rose 0.2% in March, following a 0.2% drop in the preceding month.
In February upward pressure came from cost of services less energy (up 3.1% year-on-year and following a 3.0% surge in January). Within the category, cost of shelter went up 3.3% year-on-year, cost of medical care rose 3.9% and cost of transportation services increased 2.6%. Additionally, consumers paid more for food in February (up at an annualized rate of 0.9%, accelerating from a 0.8% surge in January), according to the report by the Bureau of Labor Statistics. The largest downward pressure on the annual CPI came from prices of energy (down 12.5% in February from a year ago, or a steeper decline compared to January).
The annualized core consumer inflation, which is stripped of prices of food and energy, probably remained at 2.3% for a second consecutive month in March, according to expectations. It has been the highest core inflation since May 2012.
If the general CPI tends to approach the inflation objective, set by the Federal Reserve and considered as providing price stability, or a level below but close to 2%, this will usually bolster the appeal of the US dollar, as it heightens the probability of monetary policy tightening.
The Bureau of Labor Statistics is to release the official CPI report at 12:30 GMT.
Fed Speakers
At 14:00 GMT the Fed President for Atlanta, Dennis Lockhart, and Fed Board of Governors member, Jerome Powell are expected to take a statement. These events will be closely watched by market players for hints over how the central banks tightening cycle will develop in the future.
Canada
New Housing Price Index
Selling prices of new homes in Canada probably rose for an 11th straight month in February, up 0.1%, according to market expectations. In January compared to December 2015 prices went up another 0.1%. Home values climbed at a rate of 1.6% in January compared to the same month a year ago, while matching the rates of increase reported in November and December 2015. The New Housing Price Index is a key indicator, reflecting the health of the Canadian housing market. Given the current state of the economy, in case prices surged more than anticipated, this would be an indication of a stronger consumer confidence and would, therefore, have a limited bullish effect on the loonie. Statistics Canada will 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 – 1.2826
R2 – 1.2833
R3 (range resistance) – 1.2841
R4 (range breakout) – 1.2864
S1 – 1.2810
S2 – 1.2803
S3 (range support) – 1.2795
S4 (range breakout) – 1.2772
By using the traditional method of calculation, the weekly pivot levels for USD/CAD are presented as follows:
Central Pivot Point – 1.3050
R1 – 1.3148
R2 – 1.3316
R3 – 1.3414
S1 – 1.2882
S2 – 1.2784
S3 – 1.2616
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