Yesterday’s trade saw USD/CAD within the range of 1.1809-1.1876. The daily high has also been the highest level since May 4th 2009. The pair closed at 1.1814, losing 0.19% on a daily basis.
At 8:14 GMT today USD/CAD was up 0.05% for the day to trade at 1.1824. The pair touched a daily high at 1.1839 at 7:45 GMT.
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 week ended on January 2nd, probably decreased to 290 000 from 298 000 in the prior week. The latter has been the highest number of claims since the week ended on November 21st,. The 4-week moving average, an indicator lacking seasonal effects, was 290 750, marking an increase of 250 from the previous weeks revised average. The prior weeks average was revised up by 250 from 290 250 to 290 500.
Initial jobless claims number is a short-term indicator, reflecting lay-offs in the country. In case the number of claims fell more than projected, this would have a bullish effect on the greenback.
The number of continuing jobless claims probably increased to the seasonally adjusted 2 370 000 during the week ended on December 26th, from 2 353 000 in the previous week. The latter was a decrease by 53 000 compared to the revised up number of claims, reported during the week ended on December 12th. This indicator represents the actual number of people unemployed and currently receiving unemployment benefits, who filed for unemployment assistance at least two weeks ago.
The Department of Labor is to release the weekly report at 13:30 GMT.
Inflation concerns
Federal Reserve policy makers expressed concerns that consumer inflation in the US may remain below the bank’s inflation objective, due to the sharp drop in prices of oil and the strong dollar.
“With regard to inflation, a number of participants saw a risk that it could run persistently below their 2 percent objective, with some expressing concern that such an outcome could undermine the credibility of the Committee’s commitment to that objective,” according to the record, released yesterday.
“There is more concern over the inflation situation, and that’s going to frame the debate for the coming weeks,” said Thomas Costerg, an economist at Standard Chartered Bank in New York, cited by Bloomberg.
The minutes of the Federal Open Market Committee’s most recent meeting on policy (December 16th-17th) revealed that the Committee agreed the economy was likely to keep improving, which would result in further job gains.
The minutes also confirmed Fed Chair Yellen’s statement at the press conference in December, that the central bank’s new policy guidance implies a rate hike was not likely before the policy meeting in April.
Canada
New Housing Price Index
Selling prices of new homes in Canada probably rose 0.2% in November compared to a month ago, following another 0.1% increase in October. If so, this would be the fourth consecutive month of gains. Prices climbed at a rate of 1.6% in October compared to October 2013, or matching the annual rate in September, while also being the fastest since April. The New Housing Price Index is a key indicator, reflecting the health of Canadian housing market. In case prices surged more than anticipated, this would be an indication of a strong demand and would, therefore, have a bullish effect on the loonie. Statistics Canada will release the official data at 13:30 GMT.
Pivot Points
According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.1833. In case USD/CAD manages to breach the first resistance level at 1.1857, it will probably continue up to test 1.1900. In case the second key resistance is broken, the pair will probably attempt to advance to 1.1924.
If USD/CAD manages to breach the first key support at 1.1790, it will probably continue to slide and test 1.1766. With this second key support broken, the movement to the downside will probably continue to 1.1723.
The mid-Pivot levels for today are as follows: M1 – 1.1745, M2 – 1.1778, M3 – 1.1812, M4 – 1.1845, M5 – 1.1879, M6 – 1.1912.
In weekly terms, the central pivot point is at 1.1710. The three key resistance levels are as follows: R1 – 1.1855, R2 – 1.1930, R3 – 1.2075. The three key support levels are: S1 – 1.1635, S2 – 1.1490, S3 – 1.1415.
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