Forex Market: USD/CAD daily trading outlook

Friday’s trade saw USD/CAD within the range of 1.2618-1.2760. The pair closed at 1.2670, losing 0.52% on a daily basis. It has been the 39th drop in the past 79 trading days. The daily low has been the lowest level since April 20th, when a low of 1.2590 was registered. In weekly terms, USD/CAD depreciated 1.19% during the past week. It has been the 13th drop in the past 16 weeks and also a fourth consecutive one. USD/CAD has depreciated 2.45% so far during the current month, following two consecutive months of decline. In March the major pair slid 3.94%, or the most since April 2015.

At 7:20 GMT today USD/CAD was edging up 0.20% on the day to trade at 1.2696. The pair touched a daily high at 1.2697 at 7:13 GMT, overshooting the daily R2 level, and a daily low at 1.2652 during early Asian trade.

The loonie remained in proximity to recent highs, as crude oil futures preserved gains on Friday. April 22nd marked the 49th gain in oil prices out of the past 90 trading days. Oil futures for June delivery went up as high as $44.45 per barrel on April 22nd, making a lower-high test of the high from April 21st (which has been the highest price level since November 10th 2015), and closed at $43.73, soaring 1.27% from Thursdays close. As of 7:29 GMT today the commodity was retreating 1.02% to trade at $43.28, after going down as low as $42.96 per barrel earlier.

On Monday USD/CAD trading may be influenced by the following macroeconomic report as listed below.

Fundamentals

United States

New Home Sales

Sales of new single-family homes probably rose 1.5% to the seasonally adjusted annual rate of 527 000 in March, according to market expectations, from 512 000 reported in February. Sales in the West went up 38.5% in February, rebounding from a 32.7% slump in the previous month. On the other hand, sales in the South were 4.1% lower, after a 4.6% surge in January, sales in the Midwest decreased 17.9% during the period and those in the Northeast plummeted 24.2%.

The median sales price of new houses sold went down as low as USD 301 400 in February, after being at USD 283 900 in the preceding month. The average sales price went down to USD 348 900 in February from USD 363 400 in January. At the end of the month, the seasonally adjusted estimate of new houses for sale was 240 000, up from 236 000 at the end of January. It represents a supply of 5.6 months at the current sales rate, according to the report by the US Census Bureau.

In case the index showed a better-than-anticipated performance, this would have a strong bullish effect on the US dollar. The Census Bureau is to report the official figure at 14:00 GMT.

Correlation with other Majors

Taking into account the week ended on April 22nd and the daily closing levels of the major currency pairs, we come to the following conclusions in regard to the strength of relationship:

USD/CAD to EUR/USD (0.0524, or very weak)
USD/CAD to USD/CHF (-0.1981, or weak)
USD/CAD to NZD/USD (-0.2455, or weak)
USD/CAD to AUD/USD (-0.4376, or moderate)
USD/CAD to USD/JPY (-0.4628, or moderate)
USD/CAD to GBP/USD (-0.7586, or strong)

1. During the examined period USD/CAD moved strongly in the opposite direction compared to GBP/USD.

2. USD/CAD moved to a moderate extent in the opposite direction compared to AUD/USD and USD/JPY during the past week.

3. The correlation between USD/CAD and USD/CHF, USD/CAD and NZD/USD was insignificant.

4. USD/CAD moved almost independently compared to EUR/USD during the period in question.

Daily and Weekly Pivot Levels

By employing the Camarilla calculation method, the daily pivot levels for USD/CAD are presented as follows:

R1 – 1.2683
R2 – 1.2696
R3 (range resistance) – 1.2709
R4 (range breakout) – 1.2748

S1 – 1.2657
S2 – 1.2644
S3 (range support) – 1.2630
S4 (range breakout) – 1.2592

By using the traditional method of calculation, the weekly pivot levels for USD/CAD are presented as follows:

Central Pivot Point – 1.2751
R1 – 1.2911
R2 – 1.3153
R3 – 1.3313

S1 – 1.2509
S2 – 1.2349
S3 – 1.2107