Yesterday’s trade (in GMT terms) saw USD/CAD within the range of 1.3447-1.3565. The pair closed at 1.3447, losing 0.77% compared to Mondays close. It has been the 180th drop in the past 382 trading days and also the sharpest one since October 10th. The major pair has trimmed its advance to 0.28% during the current month, following a 2.14% surge in October.
At 8:30 GMT today USD/CAD was inching up 0.09% on the day to trade at 1.3459. The pair touched a daily high at 1.3466 during early Asian trade, undershooting the daily R2 level, and a daily low at 1.3423 during the mid phase of the Asian trading session.
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 12:30 GMT the Fed President for Minneapolis, Neel Kashkari, is to speak at the New York Economic Club.
At 22:30 GMT the Fed President for Philadelphia, Patrick Harker, is scheduled to speak on the purposes and functions of the Federal Reserve in Philadelphia.
Economic outlook or monetary policy-related remarks would heighten USD volatility.
Producer Prices
Annual producer prices in the United States probably rose 1.2% in October, according to the median estimate by experts. If so, this would be the fastest annual rate of growth since November 2014. In September, prices went up 0.7%, while exceeding market expectations. In case annual producer prices rose at a faster rate than anticipated in October, this would have a limited-to-moderate bullish effect on the US dollar.
The nation’s annualized core producer price inflation, which excludes prices of volatile categories such as food and energy, probably accelerated to 1.5% in October from 1.2% in September. If so, this would be the fastest annual increase in the core PPI since January 2015, when the index gained 1.6%. The Bureau of Labor Statistics is expected to report on the official PPI performance at 13:30 GMT.
Industrial Production
Industrial output in the United States probably rose 0.2% in October, according to market expectations, following a 0.1% increase in September. The latter came below the median forecast by analysts.
In September, output in the US mining sector rose for a fifth straight month, up 0.4%, as increases in oil and gas well drilling and servicing, in coal mining and in non-metallic mineral mining and quarrying neutralized a drop in crude oil extraction.
The gauge for utilities registered a 1.0% monthly drop in September.
Manufacturing production, which accounts for almost three quarters of total industrial production, expanded 0.2% in September from a month ago, as production of durables remained flat, production of non-durables went up 0.5%, while output in other manufacturing areas (publishing and logging) shrank 0.8%.
A larger-than-projected monthly increase in the index would usually have a moderate bullish effect on the US dollar. The Board of Governors of the Federal Reserve is to release the official production data at 14:15 GMT.
NAHB Housing Market Index
The National Association of Home Builders (NAHB) Housing Market Index probably remained steady at a reading of 63.0 in November, according to market expectations. If so, November would be the 29th consecutive month, when the gauge stood in the area above 50.0. In October, the sub-index of sales expectations during the next 6 months rose to a level of 72.0 from 71.0 in the prior month, the gauge of buyer traffic slipped to 46.0 from 47.0 in September, while the gauge of current sales conditions went down to 69.0 from 71.0 in September.
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 limited-to-moderate support to the US dollar. The official report is scheduled for release at 15:00 GMT.
Canada
Manufacturing Sales
Manufacturing sales in Canada probably rose for a fourth straight month in September, going up at a monthly rate of 0.1%, according to market expectations. In August compared to July shipments were 0.9% higher, which has been the strongest monthly rate of increase since April. The Monthly Survey of Manufacturing features statistical data regarding sales of finished goods, inventories, unfilled orders and new orders in Canada’s sector of manufacturing. About 10 500 items and 27 000 companies are encompassed.
Manufacturing sales are considered as an indicator of demand in the future. An increase in the number of goods and unsold inventories suggests, that demand is insufficient and vice versa. At the same time, an increase in sales (shipments) suggests a stronger demand. Therefore, in case shipments rose at a faster pace than anticipated in September, this might have a limited-to-moderate bullish effect on the Canadian dollar. Statistics Canada will release the official data at 13:30 GMT.
Bond Yield Spread
The yield on Canada’s 2-year government bonds went up as high as 0.670% on November 15th, after which it closed at 0.662% to lose 0.008 percentage point compared to November 14th.
Meanwhile, the yield on US 2-year government bonds climbed as high as 1.029% on November 15th, or the highest level since January 4th (1.036%), after which it fell to 1.005% at the close to add 0.001 percentage point compared to November 14th.
The spread between 2-year US and 2-year Canadian bond yields, which reflects the flow of funds in a short term, widened to 0.343% on November 15th from 0.334% on November 14th. The November 15th yield spread has been the largest one since March 15th, when the difference was 0.394%.
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 – 1.3458
R2 – 1.3469
R3 (Range Resistance – Sell) – 1.3479
R4 (Long Breakout) – 1.3512
R5 (Breakout Target 1) – 1.3550
R6 (Breakout Target 2) – 1.3565
S1 – 1.3436
S2 – 1.3425
S3 (Range Support – Buy) – 1.3415
S4 (Short Breakout) – 1.3382
S5 (Breakout Target 1) – 1.3344
S6 (Breakout Target 2) – 1.3329
By using the traditional method of calculation, the weekly levels of importance for USD/CAD are presented as follows:
Central Pivot Point – 1.3453
R1 – 1.3643
R2 – 1.3739
R3 – 1.3929
R4 – 1.4118
S1 – 1.3357
S2 – 1.3167
S3 – 1.3071
S4 – 1.2974
In monthly terms, for USD/CAD we have the following pivots:
Central Pivot Point – 1.3283
R1 – 1.3560
R2 – 1.3711
R3 – 1.3988
R4 – 1.4265
S1 – 1.3132
S2 – 1.2855
S3 – 1.2704
S4 – 1.2553
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