Friday’s trade saw USD/CAD within the range of 1.2831-1.2953. The pair closed at 1.2909, advancing 0.43% on a daily basis. It has been the 45th gain in the past 89 trading days. The daily high has been the highest level since April 18th, when a high of 1.2992 was registered. In weekly terms, USD/CAD appreciated 2.84% during the past week. It has been the 4th gain in the past 18 weeks and also the steepest one since the week ended on December 13th 2015, when a 2.95% surge was recorded. The major pair has extended its advance to 2.96% so far during the current month, following three consecutive months of decline.
At 6:47 GMT today USD/CAD was inching down 0.05% on the day to trade at 1.2926. The pair touched a daily high at 1.2950 during the early phase of the Asian trading session, overshooting the range resistance level (R3), and a daily low at 1.2908 at 6:29 GMT.
Meanwhile, crude oil futures marked their 55th gain out of the past 100 trading days on May 6th. Oil futures for June delivery went up as high as $45.34 per barrel on May 6th and closed at $44.66, gaining 0.77% compared to Thursday’s close. As of 6:54 GMT today the commodity was edging down 0.39% to trade at $45.42, after going down to as low as $45.27 per barrel earlier.
On Monday USD/CAD trading may be influenced by the following macroeconomic reports and other events as listed below.
Fundamentals
United States
Feds Evans Statement
At 9:10 GMT the Federal Reserve President for Chicago and also a FOMC member, Charles Evans, is expected to take a statement. His remarks will be closely paid attention to by market players for hints over how the Feds policy tightening cycle will develop in the future.
Canada
Housing Starts
The number of housing starts in Canada probably dropped to the seasonally adjusted annual level of 195 300 in April from 204 300 in March. Urban housing starts were 7% lower to reach 185 022 units in March, the multiple segment registered a 9.7% slump to 123 207 units, while the single-detached segment – a 1.1% drop to 61 815 units. Urban housing starts registered a drop in British Columbia, Quebec, Atlantic Canada and the Prairies, while recording growth in numbers in Ontario during the same month. At the same time, housing starts in rural areas were reported at a seasonally adjusted annual level of 19 299 units in March.
Housing starts are considered as a key indicator, reflecting the strength of the nation’s housing sector. In case the number of housing starts decreased more than anticipated in April, this would have a moderate bearish effect on the Canadian dollar. The official report by the Canadian Mortgage and Housing Corporation is due out at 12:15 GMT.
Correlation with other Majors
Taking into account the week ended on May 6th and the daily closing levels of the major currency pairs, we come to the following conclusions in regard to the strength of relationship:
USD/CAD to USD/JPY (0.9224, or very strong)
USD/CAD to USD/CHF (0.7231, or strong)
USD/CAD to EUR/USD (-0.8107, or very strong)
USD/CAD to AUD/USD (-0.9489, or very strong)
USD/CAD to GBP/USD (-0.9800, or very strong)
USD/CAD to NZD/USD (-0.9811, or very strong)
1. During the examined period USD/CAD moved strongly in one and the same direction with USD/CHF.
2. USD/CAD moved almost equally in the opposite direction compared to EUR/USD, AUD/USD, GBP/USD and NZD/USD during the past week. This relationship has been the most pronounced between USD/CAD and NZD/USD, as the correlation between these two major pairs was almost perfect.
3. USD/CAD moved almost equally in one and the same direction with USD/JPY during the period in question.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for USD/CAD are presented as follows:
R1 – 1.2920
R2 – 1.2931
R3 (range resistance) – 1.2943
R4 (range breakout) – 1.2976
S1 – 1.2898
S2 – 1.2887
S3 (range support) – 1.2875
S4 (range breakout) – 1.2842
By using the traditional method of calculation, the weekly pivot levels for USD/CAD are presented as follows:
Central Pivot Point – 1.2773
R1 – 1.3089
R2 – 1.3268
R3 – 1.3584
S1 – 1.2594
S2 – 1.2278
S3 – 1.2099
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