Yesterday’s trade (in GMT terms) saw USD/CAD within the range of 1.3164-1.3281. The pair closed at 1.3196, edging down 0.23% compared to Mondays close. It has been the 166th drop in the past 347 trading days. The daily high has been a level unseen since March 28th, when a high of 1.3287 was registered. The major pair has pared its advance to 0.69% so far during the current month, following a 0.59% gain in August.
At 8:28 GMT today USD/CAD was edging up 0.17% on the day to trade at 1.3218. The pair touched a daily high at 1.3229 during mid-Asian trade, overshooting the range resistance level (R3), and a daily low at 1.3194 during the early phase of the Asian trading session.
Meanwhile, crude oil futures marked their 105th drop out of the past 201 trading days on September 27th. Oil for November delivery went down as low as $44.19 per barrel, or a level unseen since September 20th, and closed at $44.67, plunging 2.74% compared to Monday’s close. As of 8:30 GMT today the commodity was edging up 0.47% to trade at $44.88, after going up as high as $45.09 per barrel earlier. Crude oil prices and CAD valuation tend to be strongly positively correlated.
On Wednesday USD/CAD trading may be influenced by the following macroeconomic reports and other events as listed below.
Fundamentals
United States
Fed Speakers
At 12:45 GMT Federal Open Market Committee member, Neel Kashkari, is expected to take a statement, followed by James Bullard at 14:15 GMT, Charles Evans at 17:30 GMT, Loretta Mester at 20:35 GMT and Esther George at 23:15 GMT. Any hints in regard to the Bank’s policy stance or US economic outlook would certainly heighten USD volatility.
Meanwhile, at 14:00 GMT Fed Chair, Janet Yellen, is to give semi-annual testimony on Federal Reserve supervision and regulation of the financial system in front of the House Financial Services Committee.
Durable Goods Orders
The value of durable goods orders in the United States probably shrank 1.4% in August from a month ago, according to the median forecast by experts. In July, orders rose at a monthly rate of 4.4%, recovering after two consecutive months of decline. It has been the steepest monthly increase since October 2015.
The value of shipments of manufactured durable goods, up in three out of the past four months, rose 0.2% (or USD 0.4 billion) to reach USD 232.9 billion in July. The value of unfilled orders for manufactured durable goods, down for a second consecutive month, fell 0.1% (or USD 0.8 billion) to reach USD 1,126.6 billion in July. At the same time, the value of inventories of manufactured durable goods, up after six straight months of decline, went up 0.3% (or USD 1.2 billion) during the period to USD 383.0 billion, according to data by the US Census Bureau.
Non-defense new orders for capital goods climbed 10.2% (or USD 6.6 billion) to USD 71.6 billion in July, while defense new orders for capital goods surged 35.7% (or USD 2.5 billion) during the month to USD 9.6 billion.
The value of durable goods orders, excluding transportation, probably shrank 0.4% in August from a month ago, according to expectations, following a revised down 1.3% surge in July. The latter has been the fastest monthly rate of increase since March 2014, when core orders went up at a revised up 2.9% (2.4% previously) pace.
In case the general index dropped at a faster-than-projected rate in August, this would have a strong bearish effect on the US dollar, due to negative 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.
Bond Yield Spread
The yield on Canada’s 2-year government bonds went up as high as 0.511% on September 27th, after which it closed at 0.497% to lose 0.003 percentage point compared to September 26th.
Meanwhile, the yield on US 2-year government bonds climbed as high as 0.770% on September 27th, or the highest level since September 23rd (0.787%), after which it fell to 0.750% at the close to add 1.2 basis points (0.012 percentage point) compared to September 26th.
The spread between 2-year US and 2-year Canadian bond yields, which reflects the flow of funds in a short term, widened to 0.253% on September 27th from 0.238% on September 26th. The September 27th yield spread has been the largest one since June 8th, when the difference was 0.260%.
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 – 1.3207
R2 – 1.3217
R3 (Range Resistance – Sell) – 1.3228
R4 (Long Breakout) – 1.3260
R5 (Breakout Target 1) – 1.3298
R6 (Breakout Target 2) – 1.3313
S1 – 1.3185
S2 – 1.3175
S3 (Range Support – Buy) – 1.3164
S4 (Short Breakout) – 1.3132
S5 (Breakout Target 1) – 1.3094
S6 (Breakout Target 2) – 1.3079
By using the traditional method of calculation, the weekly levels of importance for USD/CAD are presented as follows:
Central Pivot Point – 1.3138
R1 – 1.3275
R2 – 1.3382
R3 – 1.3519
R4 – 1.3657
S1 – 1.3031
S2 – 1.2894
S3 – 1.2787
S4 – 1.2681
In monthly terms, for USD/CAD we have the following pivots:
Central Pivot Point – 1.3024
R1 – 1.3283
R2 – 1.3462
R3 – 1.3721
R4 – 1.3981
S1 – 1.2845
S2 – 1.2586
S3 – 1.2407
S4 – 1.2229
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