Yesterday’s trade saw USD/CAD within the range of 1.2895-1.3086. The pair closed at 1.2912, ticking down 0.01% on a daily basis. It has been the 56th drop in the past 118 trading days. The daily high has been the highest level since June 3rd, when a high of 1.3108 was registered. USD/CAD has gone down 1.21% so far in June, following a 4.31% surge in the prior month.
At 7:04 GMT today USD/CAD was edging up 0.16% on the day to trade at 1.2933. The pair touched a daily high at 1.2967 during the early phase of the Asian trading session, undershooting the range resistance level (R3), and a daily low at 1.2899 during early Asian trade as well.
Canadas dollar retreated for a sixth straight day against its US counterpart, as crude oil futures tested lows unseen since May 13th on Thursday. Crude oil marked its 61st drop out of the past 129 trading days on June 16th. Oil for July delivery went down as low as $45.84 per barrel and closed at $46.25, tumbling 3.67% compared to Wednesday’s close. As of 7:17 GMT today the commodity was gaining 0.94% to trade at $46.69, after going up as high as $46.77 per barrel earlier, as Brexit fears seemed to have eased.
On Friday USD/CAD trading may be influenced by the following macroeconomic reports as listed below.
Fundamentals
United States
Housing Starts, Building Permits
The number of housing starts in the United States probably fell 1.9% to 1.150 million units in May, according to market expectations, from the seasonally adjusted annual rate of 1.172 million during the prior month. The latter has been the highest number of starts since February, when a revised up level of 1.194 million was reported. In April, starts of single-family houses increased at a monthly rate of 3.3% to 778 000, while starts of buildings with five units or more rose 10.7% to reach 373 000. In April, housing starts marked the largest increase in the Midwest (up 22.2%), followed by starts in the South (up 14.1%). On the other hand, housing starts fell the most in the West (down 10%), followed by starts in the Northeast (down 7.6%).
Housing starts represent a gauge to measure residential units, on which construction has already begun every month. A start in construction is defined as the foundation laying of a building and it encompasses residential housing primarily.
Meanwhile, the number of building permits in the country probably went up 3% to 1.150 million in May from an annual level of 1.116 million in April. If expectations were met, this would be the highest level since February, when the revised up 1.177 million units were reported. Single-family authorizations rose at a monthly rate of 1.5% to reach 736 000 units in April, while permits of units in buildings with five units or more were reported to have increased 9.4% to 348 000.
Building permits are permits, issued in order to allow excavation. An increase in the number of building permits and housing starts usually occurs a few months after mortgage rates in the country have been reduced. Authorizations are not required in all regions of the United States. Building permits, as an indicator, also provide clues in regard to demand in the US housing market. In case a higher-than-anticipated figure was reported, this would have a moderate bullish effect on the US dollar. The official housing data are due out at 12:30 GMT.
Canada
Consumer Price Inflation
The annualized consumer inflation in Canada probably slowed down to 1.6% in May, according to market expectations, from 1.7% in April. The latter has been the largest annual increase in consumer prices since January, when the general index rose 2.0%.
In April prices of food rose 3.2% year-on-year, following a 3.6% increase in the previous month. Consumers also paid more for shelter during the month (a 1.4% year-on-year increase, following a 1.1% rise in March) and transportation (a 0.9% gain, following a 1.0% drop in March). On the other hand, cost of energy dropped 3.2% in April, following a 7.8% slump in March, according to the report by the Statistics Canada.
Bank of Canadas (BoC) annualized Core CPI, which excludes prices of fruits, vegetables, gasoline, fuel oil, natural gas, mortgages, intercity transportation, and tobacco products, probably decelerated to 2.1% in May, according to market expectations, from 2.2% in April. The latter has been the highest annual core inflation since July 2015, when the index rose 2.4%. This is the key measure of inflation, on which the central bank bases its decisions regarding monetary policy. In case both the general CPI and the core CPI met expectations or even fell short of them in May, this would have a strong bearish impact on the Canadian dollar. The official CPI report by the Statistics Canada is due out at 12:30 GMT.
Daily, Weekly and Monthly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for USD/CAD are presented as follows:
R1 – 1.2930
R2 – 1.2947
R3 (range resistance) – 1.2965
R4 (range breakout) – 1.3017
S1 – 1.2894
S2 – 1.2877
S3 (range support) – 1.2859
S4 (range breakout) – 1.2807
By using the traditional method of calculation, the weekly pivot levels for USD/CAD are presented as follows:
Central Pivot Point – 1.2807
R1 – 1.2962
R2 – 1.3140
R3 – 1.3295
S1 – 1.2629
S2 – 1.2474
S3 – 1.2296
In monthly terms, for USD/CAD we have the following pivots:
Central Pivot Point – 1.2914
R1 – 1.3317
R2 – 1.3646
R3 – 1.4102
S1 – 1.2638
S2 – 1.2182
S3 – 1.1906
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