Forex Market: USD/CAD daily trading outlook

Yesterday’s trade saw USD/CAD within the range of 1.3178-1.3077. The pair closed 0.2% higher at 1.3153, rising for a fourth day.

At 06:42 GMT today USD/CAD was down 0.17% to trade at 1.3133, holding in a daily range of 1.3124 – 1.3176, and is up 0.3% on a weekly basis.

Fundamentals

United States

Redbook Research Inc. will release its Johnson Redbook Index for the seven days through August 1st at 12:55 GMT. This metric measures the growth in US retail sales and is based on sales data provided by around 9 000 large general merchandise retailers representing over 80% of the equivalent “official” retail sales series published by the Commerce Department. The year-over-year value of the metric was at 1.0% for the seven days through July 25th, while the month-on-month reading came in at 0.1%.

A separate report might show that factory orders in the United States probably rose 1.8% in June from a month earlier, offsetting an unrevised 1.0% contraction in May and a downward-revised 0.7% decline in April. Excluding the sector of transportation, factory orders dropped 0.1% in May.

This indicator presents the total value of new purchase orders placed at manufacturers for durable and non-durable goods and can provide an insight into inflation and growth in the US manufacturing sector. In case new orders rose more than anticipated, this would have a bullish effect on the greenback. The US Census Bureau will release the official data at 14:00 GMT.

Canada

Canadian Manufacturing PMI probably eased to 51.0 in July from 51.3 a month earlier, the Royal Bank of Canada is expected to report at 13:30 GMT. Still, this would be a second consecutive month of growth in the sector after four months of slight contraction.

The PMI report is based on data collected from monthly replies to questionnaires sent out to supply managers in over 400 industrial companies. The PMI is a compound index based on five individual indexes with different weights: new orders, production, employment, delivery time, stocks of purchases. Values of the index above the key level of 50.0 indicate an overall increase in activity in the sector, while readings below 50.0 are indicative of a contraction. PMIs are earlier indicators of economic conditions published on a monthly basis and are available well before the publication of relevant data by government authorities. Thus, they provide an earlier insight about economic development trends. In case activity growth in the sector slowed down more than expected, this would have a bearish effect on the loonie.

Pivot points

According to Binary Tribune’s daily analysis, the pair’s central pivot point stands at 1.3136. In case it penetrates the first resistance level at 1.3195, it will encounter next resistance at 1.3237. If breached, upside movement may attempt to advance to 1.3296.

If the cross drops below its S1 level at 1.3094, it will next see support at 1.3035. If the second key support zone is breached, downward movement may extend to 1.2993.

In weekly terms, the central pivot point is at 1.3014. The three key resistance levels are as follows: R1 – 1.3170, R2 – 1.3250, R3 – 1.3406. The three key support levels are: S1 – 1.2934, S2 – 1.2778, S3 – 1.2698.