Yesterday’s trade saw USD/CAD within the range of 1.2658-1.2717. The pair closed at 1.2677, inching up 0.06% on a daily basis. It has been the 41st gain in the past 80 trading days. USD/CAD has depreciated 2.58% so far during the current month, following two consecutive months of decline.
At 7:38 GMT today USD/CAD was edging down 0.24% on the day to trade at 1.2647. The pair touched a daily high at 1.2688 during the early phase of the Asian trading session, making an exact test of the daily R2 level, and a daily low at 1.2661 during mid-Asian trade.
Meanwhile, crude oil futures came off five-month highs on Monday. April 25th marked the 42nd drop in oil prices out of the past 91 trading days. Oil futures for June delivery went down as low as $42.58 per barrel on April 25th, or the lowest level since April 20th, and closed at $42.89, losing 1.93% compared to Friday’s close. As of 7:52 GMT today the commodity was edging up 0.14% to trade at $42.95, after going up as high as $43.16 per barrel earlier.
On Tuesday USD/CAD trading may be influenced by the following macroeconomic reports and other events as listed below.
Fundamentals
United States
Durable Goods Orders
The value of durable goods orders in the United States probably rose 1.8% in March from a month ago, according to the median forecast by experts, following a revised down 3.0% drop in February.
The value of shipments of manufactured durable goods, down in two of the past three months, dropped 0.9% (or USD 2.1 billion) in February to reach USD 238.3 billion. The value of unfilled orders for manufactured durable goods, down in two of the past three months, fell 0.4% (or USD 4.2 billion) in February to reach USD 1,183.7 billion. At the same time, the value of inventories of manufactured durable goods, down in seven of the past eight months, shrank 0.3% (or USD 1.1 billion) during the period to USD 394.3 billion, according to data by the US Census Bureau.
Non-defense new orders for capital goods dropped 7.5% (or USD 5.9 billion) in February to USD 72.7 billion, while defense new orders for capital goods shrank 25.6% (or USD 2.6 billion) during the month to USD 7.5 billion.
Durable goods orders, as an indicator, gauge the strength of US manufacturing sector and represent a major portion of the nations factory orders. This is a closely watched report on manufacturing activity, because durable goods are the first type of goods to be affected by an economic downturn or upturn.
The value of durable goods orders, excluding transportation, probably rose 0.5% in March from a month ago, according to expectations, following a revised down 1.3% slump in February. The latter has been the largest monthly decrease since December 2013, when core orders were down at a revised up 1.3%. 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 rose at a faster-than-projected pace, this would have a strong bullish effect on the US dollar, due to positive 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.
Services PMI by Markit – preliminary reading
Activity in the US sector of services probably increased at a faster rate in April from a month ago, with the corresponding preliminary Purchasing Managers Index coming in at a reading of 52.3, according to expectations. In March the services PMI was reported at a final 51.3, improving from a preliminary reading of 51.0. According to Markit, in March new work increased at a record low rate, because of uncertainty over US economic outlook and cautious spending patterns. Input cost inflation remained lower, while output costs registered a marginal increase.
The PMI is based on data collected from a representative panel of more than 400 private sector companies, which encompasses industries such as transport and communication, financial intermediaries, business and personal services, computing & IT and hotels & restaurants. Values above the key level of 50.0 indicate predominant optimism (expansion in general activity). In case a faster than-expected expansion in services sector activity is reported, this would have a moderate bullish effect on the US dollar, as services contribute to a considerable portion of the US GDP. The preliminary reading by Markit Economics is due out at 13:45 GMT.
CB Consumer Confidence Index
Confidence among consumers in the United States probably lowered in April, with the corresponding index coming in at a reading of 96.0, according to market expectations. In March the gauge was reported at 96.2, or the highest since January.
This indicator measures the level of individuals confidence in the US economic development. It is considered as a leading indicator, as it gives an early insight into consumer spending, which accounts for a major part of the nations GDP.
In case the index slowed down more than anticipated, this would have a strong bearish effect on the US dollar, as lower confidence suggests a lesser willingness to spend and, respectively, a slower economic growth. The Conference Board research group is to publish the official index reading at 14:00 GMT.
Canada
BoC Poloz statement
At 12:55 GMT Bank of Canada Governor, Stephen Poloz, is expected to take a statement. His remarks may introduce a moderate-to-high volatility of the currency pairs containing the Canadian dollar.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for USD/CAD are presented as follows:
R1 – 1.2682
R2 – 1.2688
R3 (range resistance) – 1.2693
R4 (range breakout) – 1.2709
S1 – 1.2672
S2 – 1.2666
S3 (range support) – 1.2660
S4 (range breakout) – 1.2645
By using the traditional method of calculation, the weekly pivot levels for USD/CAD are presented as follows:
Central Pivot Point – 1.2751
R1 – 1.2911
R2 – 1.3153
R3 – 1.3313
S1 – 1.2509
S2 – 1.2349
S3 – 1.2107
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