Yesterday’s trade (in GMT terms) saw USD/CAD within the range of 1.3161-1.3233. The pair closed at 1.3176, edging down 0.12% compared to Tuesdays close. It has been the 170th drop in the past 353 trading days. The daily high has been a level unseen since September 28th, when a high of 1.3270 was registered. The major pair has pared its advance to 0.37% so far during the current month, following a 0.18% gain in September.
At 8:29 GMT today USD/CAD was inching up 0.09% on the day to trade at 1.3188. The pair touched a daily high at 1.3210 during early European trade, undershooting the upper range breakout level, and a daily low at 1.3175 during the early phase of the Asian trading session.
On Thursday USD/CAD trading may be influenced by the following macroeconomic reports and other events as listed below.
Fundamentals
United States
Initial, Continuing Jobless Claims
The number of people in the United States, who filed for unemployment assistance for the first time during the business week ended on September 30th, probably rose to 256 000, according to market consensus, from 254 000 in the preceding week.
The 4-week moving average, an indicator lacking seasonal effects, was 256 000, marking a decrease by 2 250 compared to the preceding week’s unrevised average. It matched a level in April this year and has also been the lowest average since 1973.
The business week, which ended on September 23rd, has been the 82nd consecutive week, when jobless claims stood below the 300 000 threshold, which suggested a healthy labor market. It has been the longest streak since 1970.
Initial jobless claims number is a short-term indicator, reflecting lay-offs in the country. In case the number of claims met expectations or increased further, this would have a moderate bearish effect on the US dollar.
The number of continuing jobless claims probably rose to the seasonally adjusted 2 074 000 during the business week ended on September 23rd, according to the median forecast by experts, from 2 062 000 in the preceding week. The latter represented a decrease by 46 000 compared to the revised down number of claims reported in the week ended on September 9th. It has also been the lowest level for insured unemployment since July 1st 2000, when 2 052 000 claims were reported. This indicator reflects the actual number of people unemployed and currently receiving unemployment benefits, who filed for unemployment assistance at least two weeks ago.
The US Department of Labor is to release the weekly report at 12:30 GMT.
Canada
Building Permits
The overall value of building permits in Canada, issued by municipalities, probably increased 3.0% in August, according to market expectations. The total value of building permits in the country went up 0.8% to reach CAD 6.5 billion in July compared to a month ago. In July, the value of non-residential permits rose 5.6% to CAD 2.4 billion, supported by higher construction intentions for institutional buildings (up 9.6%), industrial buildings (up 17.1%) and commercial buildings (up 0.3%). On the other hand, the value of residential permits shrank 2% to CAD 4.0 billion in July, which has been a fourth straight monthly drop. Permits for single-family homes went down 3%, while those for multi-family houses edged down 0.4% during the month.
Building permits, as an indicator, provide information regarding demand in Canada’s housing sector. In case the total value of permits increased more than expected in August from a month earlier, this would have a limited-to-moderate bullish effect on the Canadian Dollar. The official numbers by Statistics Canada are due out at 12:30 GMT.
BoC Wilkins speech
At 15:35 GMT Bank of Canada Senior Deputy Governor, Carolyn Wilkins, is expected to take a statement in Trois-Rivieres, Quebec. Any remarks in regard to the central bank’s future policy or Canadian macroeconomic environment would heighten CAD volatility.
Bond Yield Spread
The yield on Canada’s 2-year government bonds went up as high as 0.583% on October 5th, or the highest level since September 21st (0.592%), after which it closed at 0.577% to add 2.2 basis points (0.022 percentage point) compared to October 4th.
Meanwhile, the yield on US 2-year government bonds climbed as high as 0.857% on October 5th, or the highest level since August 29th (0.857%), after which it fell to 0.838% at the close to add 1.2 basis points (0.012 percentage point) compared to October 4th.
The spread between 2-year US and 2-year Canadian bond yields, which reflects the flow of funds in a short term, narrowed to 0.261% on October 5th from 0.271% on October 4th. The October 5th yield spread has been the lowest one since October 3rd, when the difference was 0.259%.
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 – 1.3183
R2 – 1.3189
R3 (Range Resistance – Sell) – 1.3196
R4 (Long Breakout) – 1.3216
R5 (Breakout Target 1) – 1.3239
R6 (Breakout Target 2) – 1.3248
S1 – 1.3169
S2 – 1.3163
S3 (Range Support – Buy) – 1.3156
S4 (Short Breakout) – 1.3136
S5 (Breakout Target 1) – 1.3113
S6 (Breakout Target 2) – 1.3104
By using the traditional method of calculation, the weekly levels of importance for USD/CAD are presented as follows:
Central Pivot Point – 1.3152
R1 – 1.3257
R2 – 1.3385
R3 – 1.3490
R4 – 1.3594
S1 – 1.3024
S2 – 1.2919
S3 – 1.2791
S4 – 1.2662
In monthly terms, for USD/CAD we have the following pivots:
Central Pivot Point – 1.3077
R1 – 1.3332
R2 – 1.3535
R3 – 1.3790
R4 – 1.4044
S1 – 1.2874
S2 – 1.2619
S3 – 1.2416
S4 – 1.2212
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