Friday’s trade (in GMT terms) saw USD/CAD within the range of 1.2862-1.2987. The pair closed at 1.2971, advancing 0.61% compared to Thursdays close. It has been the 159th gain in the past 295 trading days and also the steepest one since July 5th, when the pair rose 1.04%. In weekly terms, USD/CAD lost 0.56% of its value in the past week. It has been the 19th drop in the past 28 weeks. The major pair has neutralized earlier losses and is now up 0.12% so far during the current month, following a 1.29% slump in June.
At 8:16 GMT today USD/CAD was edging down 0.29% on the day to trade at 1.2934. The pair touched a daily high at 1.2967 during early Asian trade, undershooting the daily R1 level, and a daily low at 1.2931 during the early phase of the European trading session.
Meanwhile, crude oil futures marked their 70th gain out of the past 150 trading days on July 15th. Oil for September delivery went up as high as $46.33 per barrel and closed at $45.95, edging up 0.59% compared to Thursday’s close. As of 8:30 GMT today the commodity was gaining 1.31% to trade at $46.55, after going up as high as $46.82 per barrel earlier.
On Monday USD/CAD trading may be influenced by the following macroeconomic report as listed below.
Fundamentals
United States
NAHB Housing Market Index
The National Association of Home Builders (NAHB) Housing Market Index was probably unchanged at a reading of 60.0 in July, according to market expectations. If so, July would be the 25th consecutive month, when the gauge stood in the area above 50.0. In June, the sub-index of sales expectations advanced to 70.0 from 65.0 in the prior month, the gauge of buyer traffic rose to 47.0 from 44.0 in May, while the gauge of current sales conditions ticked up to 64.0 from 63.0 in May.
The indicator is based on a monthly survey in regard to current home sales and expected sales in the coming six months. Values above the key level of 50.0 indicate that housing market conditions are good. Therefore, higher-than-projected readings would provide a moderate support to the US dollar. The official report is scheduled for release at 14:00 GMT.
Correlation with other Majors
Taking into account the business week ended on July 15th 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/CHF (0.4290, or moderate)
USD/CAD to NZD/USD (0.3117, or moderate)
USD/CAD to EUR/USD (-0.6143, or strong)
USD/CAD to AUD/USD (-0.7274, or strong)
USD/CAD to GBP/USD (-0.8326, or very strong)
USD/CAD to USD/JPY (-0.8955, or very strong)
1. During the examined period USD/CAD moved strongly in the opposite direction compared to EUR/USD and AUD/USD.
2. USD/CAD moved almost equally in the opposite direction compared to GBP/USD and USD/JPY during the past week.
3. USD/CAD moved to a moderate extent in one and the same direction with NZD/USD and USD/CHF during the period in question.
Bond Yield Spread
The yield on Canada’s 2-year government bonds went as high as 0.594% on July 15th, or the highest level since June 24th (0.627%), after which it closed at 0.569% to add 2.2 basis points (0.022 percentage point) compared to July 14th.
Meanwhile, the yield on US 2-year government bonds climbed as high as 0.714% on July 15th, or the highest level since June 24th (0.755%), after which it fell to 0.681% at the close to add 0.004 percentage point compared to July 14th.
The spread between 2-year US and 2-year Canadian bond yields, which reflects the flow of funds in a short term, narrowed to 0.112% on July 15th from 0.130% on July 14th. The July 15th yield spread has been the lowest one since July 6th, when the difference was 0.096%.
Daily, Weekly and Monthly Pivot Levels
By employing the Camarilla calculation method, the daily levels of importance for USD/CAD are presented as follows:
R1 – 1.2982
R2 – 1.2994
R3 (Range Resistance – Sell) – 1.3005
R4 (Long Breakout) – 1.3040
R5 (Breakout Target 1) – 1.3080
R6 (Breakout Target 2) – 1.3097
S1 – 1.2960
S2 – 1.2948
S3 (Range Support – Buy) – 1.2937
S4 (Short Breakout) – 1.2902
S5 (Breakout Target 1) – 1.2862
S6 (Breakout Target 2) – 1.2845
By using the traditional method of calculation, the weekly levels of importance for USD/CAD are presented as follows:
Central Pivot Point – 1.2989
R1 – 1.3122
R2 – 1.3272
R3 – 1.3405
R4 – 1.3537
S1 – 1.2839
S2 – 1.2706
S3 – 1.2556
S4 – 1.2405
In monthly terms, for USD/CAD we have the following pivots:
Central Pivot Point – 1.2907
R1 – 1.3163
R2 – 1.3401
R3 – 1.3657
R4 – 1.3913
S1 – 1.2669
S2 – 1.2413
S3 – 1.2175
S4 – 1.1937
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