Forex Market: USD/CAD trading outlook for October 11th 2016

Yesterday’s trade (in GMT terms) saw USD/CAD within the range of 1.3139-1.3280. The pair closed at 1.3176, losing 0.92% compared to Fridays close. It has been the 171st drop in the past 356 trading days and also the steepest one since July 29th. The daily low has been a level unseen since October 4th, when a low of 1.3111 was registered. The major pair has trimmed its advance to 0.37% so far during the current month, following a 0.18% gain in September.

At 8:25 GMT today USD/CAD was edging up 0.34% on the day to trade at 1.3221. The pair touched a daily high at 1.3223 during early European trade and a daily low at 1.3163 during the early phase of the Asian trading session.

Canadas Dollar rose to a one-week high on Monday, as crude oil futures for November delivery reached highs not seen since June 9th. Crude oil rose to $51.60 per barrel yesterday and closed at a level of $51.35, continuing the advance from recent trading days.

On Tuesday USD/CAD trading may be influenced by the following macroeconomic report listed below.

Fundamentals

Canada

Housing Starts

The number of housing starts in Canada probably rose to the seasonally adjusted annual level of 190 000 in September from 182 703 in August. The latter has been the lowest level since January 2016. Urban housing starts dropped 6.1% to 167 879 units in August, as the multiple segment registered a 7.3% fall to 111 378 units and the single-detached segment slumped 3.7% to 56 501 units. A decrease in urban housing starts was reported in the Prairies, British Columbia, Ontario and Atlantic Canada, while an increase – in Quebec. At the same time, housing starts in rural areas were reported at 14 824 in August.

Housing starts are considered as a key indicator, reflecting the strength of the nation’s housing sector. In case the number of housing starts increased more than anticipated in September, this would have a moderate bullish effect on the Canadian dollar. The official report by the Canadian Mortgage and Housing Corporation is due out at 12:15 GMT.

Bond Yields

The yield on US 2-year government bonds climbed as high as 0.870% on October 10th, after which it fell to 0.869% at the close to add 3.1 basis points (0.031 percentage point) compared to October 7th.

Canadian bond markets remained closed on October 10th due to the Thanksgiving Day Holiday in the country.

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 – 1.3189
R2 – 1.3202
R3 (Range Resistance – Sell) – 1.3215
R4 (Long Breakout) – 1.3254
R5 (Breakout Target 1) – 1.3300
R6 (Breakout Target 2) – 1.3317

S1 – 1.3163
S2 – 1.3150
S3 (Range Support – Buy) – 1.3137
S4 (Short Breakout) – 1.3098
S5 (Breakout Target 1) – 1.3053
S6 (Breakout Target 2) – 1.3035

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

Central Pivot Point – 1.3227
R1 – 1.3385
R2 – 1.3473
R3 – 1.3631
R4 – 1.3790

S1 – 1.3139
S2 – 1.2981
S3 – 1.2893
S4 – 1.2806

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