Yesterday’s trade (in GMT terms) saw USD/CAD within the range of 1.3378-1.3469. The pair closed at 1.3454, rebounding 0.31% from Mondays close. It has been the 205th gain in the past 387 trading days. The daily low has been a level not seen since November 10th, when a low of 1.3377 was registered. The major pair has increased its advance to 0.34% so far during the current month, following a 2.14% surge in October.
At 8:59 GMT today USD/CAD was inching down 0.08% on the day to trade at 1.3443. The pair touched a daily high at 1.3458 during early European trade, undershooting the daily R1 level, and a daily low at 1.3424 during the late phase of the Asian trading session.
On Wednesday USD/CAD trading may be influenced by the following macroeconomic reports 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 November 18th, probably rose to 250 000, according to market consensus, from 235 000 in the preceding week. The latter has been the lowest number of claims since November 1973.
The 4-week moving average, an indicator lacking seasonal effects, was 253 500, marking a decrease by 6 500 compared to the preceding week’s revised up average.
The business week, which ended on November 11th, has been the 89th 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 2 030 000 during the business week ended on November 11th, according to the median forecast by experts, from 1 977 000 in the preceding week. The latter represented a drop by 66 000 compared to the revised up number of claims reported in the week ended on October 28th. It has also been the lowest figure since April 15th 2000, when 1 962 000 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 13:30 GMT.
Durable Goods Orders
The value of durable goods orders in the United States probably rebounded 1.5% in October from a month ago, according to the median forecast by experts, following an unexpected 0.1% drop in September.
The value of shipments of manufactured durable goods, up in three out of the past four months, went up 0.8% (or USD 2.0 billion) to reach USD 234.5 billion in September. The value of unfilled orders for manufactured durable goods, down for a fourth consecutive month, fell 0.4% (or USD 3.9 billion) to reach USD 1,119.3 billion in September. At the same time, the value of inventories of manufactured durable goods, up for a third consecutive month, went up 0.1% (or USD 0.5 billion) during the period to USD 384.0 billion, according to data by the US Census Bureau.
Non-defense new orders for capital goods expanded 1.5% (or USD 1.0 billion) to USD 68.2 billion in September, while defense new orders for capital goods surged 7.7% (or USD 0.9 billion) during the month to USD 11.3 billion.
The value of durable goods orders, excluding transportation, probably rose 0.2% in October from a month ago, according to expectations, following another 0.2% increase in September.
In case the general index rebounded at a faster-than-projected rate in October, this would have a strong bullish effect on the US dollar, due to positive implications in regard to the wider gauge of production, factory orders. The US Census Bureau is scheduled to release the official report at 13:30 GMT.
Manufacturing PMI by Markit – flash reading
Activity in US manufacturing sector probably rose at the same pace in November as the one from a month ago. The corresponding preliminary Manufacturing PMI probably came in at a reading of 53.4 in the current month, according to the median forecast by analysts. It has been the highest PMI reading since October 2015.
In October, the sub-gauges of production and new orders accelerated, while the sub-index of employment increased for a 40th consecutive month. At the same time, cost inflation in US manufacturing reached its highest level in two years, according to final data by Markit.
Values above the key level of 50.0 indicate predominant optimism (expanding activity). In case the flash PMI for November came in line with expectations or accelerated even further, this would have a moderate bullish effect on the US dollar. The preliminary reading is due out at 14:45 GMT.
Reuters/Michigan Consumer Sentiment Index – final reading
The monthly survey by Thomson Reuters and the University of Michigan may show that consumer confidence in the United States rose in November from a month ago. The final reading of the corresponding index, which usually comes out two weeks after the preliminary data, probably confirmed the preliminary estimate of 91.6. It has been the highest reading since June. In October, the index stood at a final reading of 87.2, down from a preliminary 87.9. The survey encompasses about 500 respondents throughout the country. The index is comprised by two major components, a gauge of current conditions and a gauge of expectations. The current conditions index is based on the answers to two standard questions, while the index of expectations is based on three standard questions. All five questions have an equal weight in determining the value of the overall index.
According to the preliminary report, the sub-index of current economic conditions, which measures US consumers’ views of their personal finances, went up to 105.9 in November from a final estimate of 103.2 in October. The sub-index of consumer expectations accelerated to a flash reading of 82.5 in November from a final value of 76.8 in October.
Respondents in the November survey expect that the rate of inflation during the next year will probably be 2.7%, up from 2.4% as expected in the October survey.
In case the final value of the November consumer sentiment index outpaced the median forecast by analysts, this would have a moderate bullish effect on the US dollar. The final reading is due out at 15:00 GMT.
New Home Sales
Sales of new single-family homes probably remained unchanged at the seasonally adjusted annual rate of 593 000 in October, according to market expectations.
In September, sales in the Northeast region rose the most (33.3% to 32 000), followed by sales in the Midwest (8.6% to 76 000) and those in the South (3.4% to 338 000). On the other hand, new home sales in the West area went down 4.5% to 147 000 during the same period.
The median sales price of new houses sold went up as high as USD 313 500 in September, after being at USD 293 800 in the preceding month. Additionally, the average sales price rose to USD 377 700 in September from USD 356 200 in August. At the end of the month, the seasonally adjusted estimate of new houses for sale was 235 000, down 0.4% from a month ago. It represents a supply of 4.8 months at the current sales rate, according to the report by the US Census Bureau.
In case the index showed a better performance than projected in October, this would have a strong bullish effect on the US Dollar. The Census Bureau is to release the official figure at 15:00 GMT.
FOMC Minutes
At 19:00 GMT the Federal Open Market Committee (FOMC) will release the minutes from its meeting on policy held on November 1st-2nd. The minutes offer detailed insights on FOMC’s monetary policy stance. This release will be closely examined by market players, as it may provide clues over how the Fed’s policy tightening cycle will develop in the future. High volatility of the currency pairs containing the US dollar is usually present after the publication.
The FOMC left the target range for the federal funds rate intact between 0.25% and 0.50% for a seventh consecutive meeting in November, as largely expected. As noted in the FOMC Statement, labor market conditions have continued to improve and economic activity growth has accelerated in comparison with the pace shown throughout H1 2016. Policy makers again reiterated that the case for a rate hike continued to gain strength.
Bond Yield Spread
The yield on Canada’s 2-year government bonds went up as high as 0.674% on November 22nd, after which it closed at 0.656% to lose 1.8 basis points (0.018 percentage point) compared to November 21st.
Meanwhile, the yield on US 2-year government bonds climbed as high as 1.107% on November 22nd, or the highest level in more than 2 years, after which it fell to 1.095% at the close to add 2.3 basis points (0.023 percentage point) compared to November 21st.
The spread between 2-year US and 2-year Canadian bond yields, which reflects the flow of funds in a short term, widened to 0.439% on November 22nd from 0.398% on November 21st. The November 22nd yield spread has been the largest one since January 25th, when the difference was 0.460%.
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 – 1.3462
R2 – 1.3471
R3 (Range Resistance – Sell) – 1.3479
R4 (Long Breakout) – 1.3504
R5 (Breakout Target 1) – 1.3533
R6 (Breakout Target 2) – 1.3546
S1 – 1.3446
S2 – 1.3437
S3 (Range Support – Buy) – 1.3429
S4 (Short Breakout) – 1.3404
S5 (Breakout Target 1) – 1.3375
S6 (Breakout Target 2) – 1.3362
By using the traditional method of calculation, the weekly levels of importance for USD/CAD are presented as follows:
Central Pivot Point – 1.3501
R1 – 1.3601
R2 – 1.3691
R3 – 1.3791
R4 – 1.3892
S1 – 1.3411
S2 – 1.3311
S3 – 1.3221
S4 – 1.3132
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
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
