Forex Market: USD/CAD daily trading forecast

Yesterday’s trade saw USD/CAD within the range of 1.2390-1.2587. The pair closed at 1.2435, losing 1.11% on a daily basis.

At 10:38 GMT today USD/CAD was up 0.08% for the day to trade at 1.2443. The pair touched a daily high at 1.2462 at 9:15 GMT.

Fundamentals

United States

Non-farm Payrolls, Unemployment rate

Employers in all sectors of economy in the United States, excluding the farming industry, probably added 234 000 new jobs in January, according to the median forecast by experts, after a job gain of 252 000 in December. If so, this would be the fifth consecutive month, when employment gains exceeded 200 000. In November there has been a job growth of 353 000, or the highest figure since May 2010, when 433 000 jobs were added.

Employment in professional and business services rose by 52 000 in December, while monthly job gains in the industry averaged 61 000 in 2014. Construction sector added 48 000 jobs, or well above the employment gains in recent months. Employment in food services and drinking places rose by 44 000, with the monthly average in the industry being 30 000 jobs in 2014. Health care added 34 000 jobs in December, while manufacturing as a whole – 17 000 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 increased 0.3% in January compared to December, when earnings unexpectedly fell by 0.2%.

The rate of unemployment in the country probably remained steady at 5.6% in January, according to expectations. If so, this would be the lowest rate since June 2008.

In December the number of long-term unemployed (those jobless for 27 weeks or longer) was essentially unchanged at 2.8 million and accounted for 31.9% of the unemployed, according to the report by the Bureau of Labor Statistics. The number of persons in part-time employment for economic reasons (sometimes referred to as involuntary part-time workers) was almost unchanged in December at 6.8 million. In addition, 2.3 million persons were marginally attached to the labor force in December, or little changed compared to December 2013.

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

Change in employment, Unemployment rate

The number of the employed people in Canada probably increased by 4 500 in January, according to market expectations. In December the number of the employed dropped by 4 300. Part-time employment decreased by 57 700 in December compared to the same month a year ago, while full-time employment was up by 53 500 during the period. There was a decrease by 33 000 in the number of people employed in accommodation and food services and a drop by 14 000 in the number of those working in “other services” such as private household services provided by nannies and home support workers. Employment in Canada’s sector of agriculture rose by 15 000 in December, mostly in greenhouse, nursery and floriculture production. Public administration employment was up by 14 000 during the same month, according to the report by the Statistics Canada. 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 Canadian dollar would be supported.

Meanwhile, the rate of unemployment in the country probably remained steady at 6.7% in January. A month ago the jobless rate has been revised up from 6.6% to 6.7%. In November the rate was reported at 6.6% and in October – at 6.5%, which has been the lowest level since November 2008. Lower-than-expected rates of unemployment would have a bullish effect on the local dollar. 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 1.2471. In case USD/CAD manages to breach the first resistance level at 1.2551, it will probably continue up to test 1.2668. In case the second key resistance is broken, the pair will probably attempt to advance to 1.2748.

If USD/CAD manages to breach the first key support at 1.2354, it will probably continue to slide and test 1.2274. With this second key support broken, the movement to the downside will probably continue to 1.2157.

The mid-Pivot levels for today are as follows: M1 – 1.2216, M2 – 1.2314, M3 – 1.2413, M4 – 1.2511, M5 – 1.2610, M6 – 1.2708.

In weekly terms, the central pivot point is at 1.2635. The three key resistance levels are as follows: R1 – 1.2895, R2 – 1.3057, R3 – 1.3317. The three key support levels are: S1 – 1.2473, S2 – 1.2213, S3 – 1.2051.