Forex Market: USD/CAD daily trading forecast

Yesterday’s trade saw USD/CAD within the range of 1.1792-1.1845. The pair closed at 1.1830, gaining 0.14% on a daily basis.

At 10:28 GMT today USD/CAD was up 0.04% for the day to trade at 1.1836. The pair touched a daily high at 1.1851 at 9:55 GMT.

Fundamentals

United States

Change in Non-farm Payrolls, Unemployment rate

Employers in all sectors of economy in the United States, excluding the farming industry, probably added 240 000 new jobs in December, according to the median forecast by experts, after a job gain of 321 000 in November. If so, this would be the fourth consecutive month, when employment gains exceeded 200 000. Novembers figure has been the highest since May 2010, when 433 000 jobs were added.

Employment in professional and business services increased by 86 000 in November, compared with an average gain of 57 000 a month during the preceding 12 months. Employment in retail trade rose by 50 000 during the same period, compared with an average gain of 22 000 per month during the past 12 months. Health care added 29 000 jobs in November, manufacturing added 28 000 jobs, while financial activities added 20 000 jobs.

The non-farm payrolls report presents the total number of US employees in any business, excluding the following four groups: farm employees, general government employees, employees of non-profit organizations, private household employees. The reading, released most often, varies between 10 000 and as much as 250 000 – 300 000 at times when economy is performing well. Despite the volatility and the possibility of large revisions, the non-farm payrolls indicator presents the most timely and comprehensive reflection of the current economic state. Total non-farm payrolls account for 80% of the workers, who produce the entire Gross Domestic Product of the United States. In case of a larger-than-expected gain in jobs, the US dollar would certainly be boosted.

Average Hourly Earnings probably climbed 0.2% in December compared to November, when earnings rose by 0.4%, or the largest monthly rate of increase since February.

Meanwhile, the rate of unemployment in the country probably dropped to 5.7% in December from 5.8% in November. If so, this would be the lowest rate since July 2008.

In November the unemployment rate for adult men climbed to 5.4% in November, the rate for adult women reached 5.3%, while the rate for teenagers was reported at 17.7%. During the month the number of unemployed persons rose to 9.1 million from 9.0 million in October, according to the report by the Bureau of Labor Statistics. The number of long-term unemployed during November (those jobless for 27 weeks or more) was at 2.8 million, down from 2.9 million in the prior month, while accounting for 30.7% of the total number of the unemployed. The number of persons in part-time employment for economic reasons was reported at 6.9 million in November, down from 7.0 million in October.

The unemployment rate represents the percentage of the eligible work force that is unemployed, but is actively seeking employment. A person who is not classified as employed or unemployed is excluded from the statistics. One counts as unemployed, if he falls in all of the following categories: he/she was unemployed during the last week; he/she is able bodied; he/she has been seeking employment for a period of at least four weeks, which end during the week when the research is conducted. People, who have been laid off and are awaiting to be hired again, are also classified as unemployed. In case the unemployment rate met expectations or even fell further, this would have a bullish effect on the greenback. The Bureau of Labor Statistics will release the official employment data at 13:30 GMT.

Canada

Housing starts, Building permits

Housing starts in Canada probably decreased to the seasonally adjusted annual level of 193 500 in December, according to expectations, from 195 600 in November, or the highest number since September, when a level of 197 400 was reported. Housing starts are considered as a key indicator, reflecting the strength of nation’s housing sector. In case the number of housing starts fell more than expected, this might have a bearish effect on the loonie. Canada’s Mortgage and Housing Corporation will release the official numbers at 13:15 GMT.

Meanwhile, the number of building permits in Canada probably rose 1.0% in November compared to October, according to the median estimate by experts. In October permits, issued by the government, were 0.7% more. Building permits, as an indicator, provide information regarding demand in Canada’s housing market. In case the number of permits rose more than anticipated, this might have a bullish effect on the Canadian dollar. Statistics Canada is to release its monthly report at 13:30 GMT.

Change in employment, Unemployment rate

The number of the employed people in Canada probably increased by 15 000 in December, according to market expectations. In October the number of the employed fell by 10 700, due to a drop in jobs in retail and wholesale trade as well as in professional services sector.

In November compared to November 2013 employment in Canada increased by 146 000, or 0.8%, as part-time employment was up 1.9% and full-time work – up 0.6%, according to the report by the Statistics Canada. Employment among persons aged between 15 and 24 was stable in November compared to a month ago, but there was a 2.3% increase, or by 56 000, in comparison with November 2013. Creation of new job positions is considered of utmost importance for consumer spending. In case employment in the country increased at a faster pace than expected, the loonie would be supported.

Meanwhile, the rate of unemployment in the country probably remained steady at 6.6% in December. In October the jobless rate dropped to 6.5%, which has been the lowest level since November 2008, from 6.8% in September. Statistics Canada is expected to release its official employment report at 13:30 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.1822. In case USD/CAD manages to breach the first resistance level at 1.1853, it will probably continue up to test 1.1875. In case the second key resistance is broken, the pair will probably attempt to advance to 1.1906.

If USD/CAD manages to breach the first key support at 1.1800, it will probably continue to slide and test 1.1769. With this second key support broken, the movement to the downside will probably continue to 1.1747.

The mid-Pivot levels for today are as follows: M1 – 1.1758, M2 – 1.1785, M3 – 1.1811, M4 – 1.1838, M5 – 1.1864, M6 – 1.1891.

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.