Friday’s trade saw USD/CAD within the range of 1.2830-1.2958. The pair closed at 1.2941, going up 0.73% on a daily basis. It has been the 47th gain in the past 94 trading days and also the steepest one since May 4th, when the pair surged 1.16%. The daily high has been the highest level since May 10th, when a high of 1.2979 was registered. In weekly terms, USD/CAD added 0.25% to its value last week. It has been the 5th gain in the past 19 weeks and also a second consecutive one. The major pair has risen 2.98% so far during the current month, following three consecutive months of decline.
At 7:36 GMT today USD/CAD was edging down 0.24% on the day to trade at 1.2924. The pair touched a daily high at 1.2940 during the early phase of the Asian trading session, undershooting the daily R1 level, and a daily low at 1.2910 at 7:08 GMT.
The loonie retreated against its US counterpart, as crude oil futures marked their 47th drop out of the past 105 trading days on May 13th. Oil for June delivery went down as low as $45.75 per barrel on May 13th, making an almost exact test of the low from a day ago, and closed at $46.21, plummeting 1.05% compared to Thursday’s close. As of 7:59 GMT today the commodity was gaining 1.90% to trade at $47.09, after going up as high as $47.14 per barrel earlier.
On Monday USD/CAD trading may be influenced by the following macroeconomic reports as listed below.
Fundamentals
United States
New York Empire State Manufacturing Index
The New York Empire State Manufacturing Index probably slipped to a value of 7.00 in May, according to the median forecast by experts, from 9.56 in April. The latter has been the highest index reading since January 2015, when the gauge was reported at 9.95.
In April, the gauge of new orders rose to 11.14 from 9.57 in the preceding month, that of shipments went down to 11.14 from 13.88. The gauge of prices paid accelerated, that of prices received rebounded, while employment levels remained little changed. The six-month outlook continued to improve during the period, as future business conditions index surged for a third consecutive month, reaching a level of 29.4 (25.5 in March).
Readings above 0.00 are indicative of improving business conditions in the region. Lower-than-anticipated index values will usually have a moderate bearish effect on the US dollar. The Federal Reserve Bank of New York is expected to release the official reading at 12:30 GMT.
NAHB Housing Market Index
The National Association of Home Builders (NAHB) Housing Market Index probably rose to 59.0 in May, according to market expectations, from 58.0 in April. If so, this would be the 23rd consecutive month, when the gauge stood in the area above 50.0 and would also be the highest reading since January.
“Builder confidence has held firm at 58 for three consecutive months, showing that the single-family housing sector continues to recover at a slow but consistent pace,” NAHB chairman, Ed Brady, said in a reference to index performance in April, cited by Business Insider. “As we enter the spring home buying season, we should see the market move forward.”
The indicator is based on a monthly survey in regard to current home sales and expected sales in the coming six months. Values above the key level of 50.0 indicate that housing market conditions are good. Therefore, higher-than-projected readings would provide a moderate support to the US dollar. The official report is scheduled for release at 14:00 GMT.
Correlation with other Majors
Taking into account the business week ended on May 13th 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 USD/CHF (0.4682, or moderate)
USD/CAD to USD/JPY (-0.2699, or weak)
USD/CAD to EUR/USD (-0.5563, or strong)
USD/CAD to AUD/USD (-0.5740, or strong)
USD/CAD to GBP/USD (-0.8129, or very strong)
USD/CAD to NZD/USD (-0.8627, or very strong)
1. During the examined period USD/CAD moved strongly in the opposite direction compared to EUR/USD and AUD/USD.
2. USD/CAD moved almost equally in the opposite direction compared to GBP/USD and NZD/USD during the past week. This relationship has been the most pronounced between USD/CAD and NZD/USD.
3. The correlation between USD/CAD and USD/JPY was insignificant.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for USD/CAD are presented as follows:
R1 – 1.2953
R2 – 1.2964
R3 (range resistance) – 1.2976
R4 (range breakout) – 1.3011
S1 – 1.2929
S2 – 1.2918
S3 (range support) – 1.2906
S4 (range breakout) – 1.2871
By using the traditional method of calculation, the weekly pivot levels for USD/CAD are presented as follows:
Central Pivot Point – 1.2908
R1 – 1.3048
R2 – 1.3155
R3 – 1.3295
S1 – 1.2801
S2 – 1.2661
S3 – 1.2554
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