Yesterday’s trade saw USD/CAD within the range of 1.3014-1.3134. The pair closed at 1.3035, going down 0.66% on a daily basis. It has been the 50th drop in the past 102 trading days, a second consecutive one and also the steepest one since April 19th, when the pair fell 0.89%. The daily low has been the lowest level since May 19th, when a low of 1.3006 was registered. The major pair has trimmed its advance to 3.37% so far during the current month, following three consecutive months of decline.
At 8:37 GMT today USD/CAD was edging down 0.44% on the day to trade at 1.2978. The pair touched a daily high at 1.3037 during the early phase of the Asian trading session, undershooting the daily R1 level, and a daily low at 1.2970 at 8:22 GMT.
Canadas dollar extended gains against its US counterpart, as crude oil futures tested highs unseen since mid-October 2015 on Wednesday. May 25th marked the 63rd gain in crude oil prices out of the past 113 trading days. Oil for July delivery went up as high as $49.75 per barrel on May 25th, or the highest price level since October 12th, and closed at $49.59, soaring 2.00% compared to Tuesday’s close. As of 8:50 GMT today the commodity was edging up 0.34% to trade at $49.76, after going up as high as $49.97 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 May 20th, probably fell to 275 000, according to market consensus, from 278 000 in the preceding week.
The 4-week moving average, an indicator lacking seasonal effects, was 275 750, marking an increase by 7 500 compared to the preceding weeks unrevised average.
The business week, which ended on May 13th has been the 63rd consecutive week, when jobless claims stood below the 300 000 threshold, which suggested a healthy labor market. It has been the longest streak in 43 years.
Initial jobless claims number is a short-term indicator, reflecting lay-offs in the country. In case the number of claims met expectations or decreased further, this would have a moderate bullish effect on the US dollar.
The number of continuing jobless claims probably fell to the seasonally adjusted 2 146 000 during the business week ended on May 13th, according to the median forecast by experts, from 2 152 000 in the preceding week. The latter represented a drop by 13 000 compared to the revised up number of claims reported in the week ended on April 29th. 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 US Department of Labor is to release the weekly report at 12:30 GMT.
Durable Goods Orders
The value of durable goods orders in the United States probably rose 0.5% in April from a month ago, according to the median forecast by experts, following a 0.8% surge in March.
The value of shipments of manufactured durable goods, down in three of the past four months, dropped 0.5% (or USD 1.1 billion) in March to reach USD 237.0 billion. The value of unfilled orders for manufactured durable goods, down in three of the past four months, were down 0.1% (or USD 1.3 billion) in March to reach USD 1,182.5 billion. At the same time, the value of inventories of manufactured durable goods, down for the first time in the past 3 months, remained almost unchanged during the period at USD 394.1 billion, according to data by the US Census Bureau.
Non-defense new orders for capital goods dropped 1.1% (or USD 0.8 billion) in March to USD 71.6 billion, while defense new orders for capital goods soared 48.4% (or USD 3.8 billion) during the month to USD 11.6 billion.
The value of durable goods orders, excluding transportation, probably rose 0.3% in April from a month ago, according to expectations, following a 0.2% contraction in March. 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. Therefore, this 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.
Pending Home Sales
The index of pending home sales in the United States probably rose 0.6% in April from a month ago, according to the median estimate by experts. In March pending home sales increased at a revised down 3.4% (3.5% previously), or the most since February 2015, when sales surged at a revised up 3.6%.
In annual terms, the index of pending home sales advanced 1.4% in March, which has been a 19th consecutive period of increase. In February pending home sales went up 0.7% year-on-year, or at the slowest rate in at least 2 years.
In case pending home sales increased at a faster pace than anticipated in April, this would have a moderate bullish effect on the US dollar. The National Association of Realtor’s (NAR) will report on the official index performance at 14:00 GMT.
Fed Speakers
At 9:15 GMT the Federal Reserve President for St. Louis and also a FOMC member, James Bullard, is expected to take a statement, followed by another member of the Committee, Jerome Powell, who is to speak at 16:00 GMT. Their remarks will be closely watched by markets for hints over the Banks future policy stance.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for USD/CAD are presented as follows:
R1 – 1.3046
R2 – 1.3057
R3 (range resistance) – 1.3068
R4 (range breakout) – 1.3101
S1 – 1.3024
S2 – 1.3013
S3 (range support) – 1.3002
S4 (range breakout) – 1.2969
By using the traditional method of calculation, the weekly pivot levels for USD/CAD are presented as follows:
Central Pivot Point – 1.3037
R1 – 1.3239
R2 – 1.3366
R3 – 1.3568
S1 – 1.2910
S2 – 1.2708
S3 – 1.2581
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