Yesterday’s trade saw USD/CAD within the range of 1.2967-1.3108. The pair closed at 1.3026, edging down 0.36% compared to Mondays close. It has been the 128th drop in the past 282 trading days. The major pair has trimmed its slump to 0.68% so far in June, following a 4.31% surge in the prior month.
At 7:39 GMT today USD/CAD was edging down 0.13% on the day to trade at 1.3009. The pair touched a daily high at 1.3043 during the early phase of the Asian trading session, overshooting the daily R1 level, and a daily low at 1.3005 during early European trade.
Meanwhile, crude oil futures rebounded from 1.5-month lows to mark their 73rd gain out of the past 137 trading days on June 28th. Oil for August delivery went up as high as $48.35 per barrel, or its highest price level since June 24th, and closed at $47.85, surging 3.28% compared to Monday’s close. As of 7:51 GMT today the commodity was gaining 1.27% to trade at $48.46, after going up as high as $48.51 per barrel earlier.
On Wednesday USD/CAD trading may be influenced by the following macroeconomic reports as listed below.
Fundamentals
United States
Personal Income, Personal Spending
Personal spending in the United States probably rose 0.4% in May, according to market expectations, while personal income was probably up for a 14th consecutive month in May, increasing at a monthly rate of 0.3%.
Consumer spending, which accounts for over two thirds of the nations GDP, rose 1.0% in April, or at the fastest monthly rate since August 2009. At the same time, personal income increased 0.4% in April, or matching the gain rate in March, which implied a robust recovery.
Wages and salaries were up USD 38.6 billion in April, following an increase by USD 30.7 billion in the preceding month, while supplements to wages and salaries rose USD 5.9 billion in April, after going up USD 5.5 billion in March. Private sector wages and salaries went up USD 37.2 billion in April, after an increase by USD 27.6 billion a month ago, while government wages and salaries rose USD 1.4 billion, after going up by USD 3.1 billion in March.
Higher-than-expected rates of increase imply good employment conditions and, therefore, are dollar positive. The Bureau of Economic Analysis is to publish the official figures at 12:30 GMT.
Pending Home Sales
The index of pending home sales in the United States probably fell 1.1% in May from a month ago, according to the median estimate by experts. In April pending home sales increased 5.1%, or the most since May 2014, when sales surged at a revised down monthly rate of 6.0%.
In annual terms, the index of pending home sales advanced 4.6% in April, which has been a 20th consecutive period of increase. In addition, Aprils rate of sales growth has been the fastest since August 2015.
In case pending home sales decreased at a faster pace than anticipated in May, this would have a moderate bearish effect on the US dollar. The National Association of Realtor’s (NAR) will report on the official index performance at 14:00 GMT.
Bond Yield Spread
The yield on Canada’s 2-year government bonds went as high as 0.518% on June 28th, after which it closed at 0.496% to lose 0.008 percentage point compared to June 27th.
Meanwhile, the yield on US 2-year government bonds climbed as high as 0.633% on June 28th, or the highest level since June 24th (0.755%), after which it fell to 0.617% at the close to add 2 basis points (0.02 percentage point) compared to June 27th.
The spread between 2-year US and 2-year Canadian bond yields, which reflects the flow of funds in a short term, rose to 0.121% on June 28th from 0.109% on June 27th. The June 28th yield spread has been the largest one since June 23rd, when the difference was 0.159%.
Daily, Weekly and Monthly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for USD/CAD are presented as follows:
R1 – 1.3039
R2 – 1.3052
R3 (range resistance) – 1.3065
R4 (range breakout) – 1.3104
S1 – 1.3013
S2 – 1.3000
S3 (range support) – 1.2987
S4 (range breakout) – 1.2948
By using the traditional method of calculation, the weekly pivot levels for USD/CAD are presented as follows:
Central Pivot Point – 1.2927
R1 – 1.3179
R2 – 1.3353
R3 – 1.3605
S1 – 1.2753
S2 – 1.2501
S3 – 1.2327
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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