Forex Market: USD/CAD daily trading outlook

Yesterday’s trade saw USD/CAD within the range of 1.2773-1.2858. The pair closed at 1.2800, losing 0.74% compared to Fridays close. It has been the 126th drop in the past 276 trading days and also a second consecutive one. The daily low has been the lowest level since June 13th, when a low of 1.2747 was registered. USD/CAD has gone down 2.38% so far in June, following a 4.31% surge in the prior month.

At 7:09 GMT today USD/CAD was edging down 0.14% on the day to trade at 1.2782. The pair touched a daily high at 1.2812 during the early phase of the Asian trading session, undershooting the daily R2 level, and a daily low at 1.2780 at 7:07 GMT.

Canadas dollar advanced a second straight day against its US counterpart on Monday, as crude oil futures tested highs unseen since June 10th. Crude oil marked its 70th gain out of the past 131 trading days on June 20th. Oil for August delivery went up as high as $49.99 per barrel and closed at $49.84, rising 3.84% compared to Friday’s close. As of 7:25 GMT today the commodity was edging down 0.44% to trade at $49.62, after going down as low as $49.51 per barrel earlier.

On Tuesday USD/CAD trading may be influenced by the following event as listed below.

Fundamentals

United States

Fed Yellens testimony

At 14:00 GMT is scheduled to testify before the Senate Banking Committee on matters, concerning US macroeconomic outlook. Any remarks made in regard to how outlook could affect the central banks monetary policy have the potential to heighten USD volatility.

Bond Yield Spread

The yield on Canada’s 2-year government bonds went as high as 0.583% on June 20th, or the highest level since June 2nd (0.591%), after which it closed at 0.580% to add 6 basis points (0.06 percentage point) compared to June 17th.

Meanwhile, the yield on US 2-year government bonds climbed as high as 0.755% on June 20th, or the highest level since June 10th (0.771%), after which it fell to 0.747% at the close to gain 1.4 basis points (0.014 percentage point) compared to June 17th.

The spread between 2-year US and 2-year Canadian bond yields, which reflects the flow of funds in a short term, shrank to 0.167% on June 20th from 0.177% on June 17th. The June 20th yield spread has been the lowest one since May 5th, when the difference was 0.149%.

Daily, Weekly and Monthly Pivot Levels

By employing the Camarilla calculation method, the daily pivot levels for USD/CAD are presented as follows:

R1 – 1.2808
R2 – 1.2816
R3 (range resistance) – 1.2823
R4 (range breakout) – 1.2847

S1 – 1.2792
S2 – 1.2784
S3 (range support) – 1.2777
S4 (range breakout) – 1.2753

By using the traditional method of calculation, the weekly pivot levels for USD/CAD are presented as follows:

Central Pivot Point – 1.2910
R1 – 1.3073
R2 – 1.3251
R3 – 1.3414

S1 – 1.2732
S2 – 1.2569
S3 – 1.2391

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