Yesterday’s trade saw USD/CAD within the range of 1.2832-1.2921. The pair closed at 1.2845, losing 0.56% compared to Fridays close. It has been the 132nd drop in the past 286 trading days and also a fifth consecutive one. The daily low has been the lowest level since June 24th, when a low of 1.2715 was registered. The major pair has depreciated 0.42% so far during the current month, following a 1.29% slump in June.
At 7:49 GMT today USD/CAD was edging up 0.15% on the day to trade at 1.2864. The pair touched a daily high at 1.2893 during the early phase of the Asian trading session, undershooting the upper range breakout level (R4), and a daily low at 1.2841 during early Asian trade as well.
Meanwhile, crude oil futures marked their 66th gain out of the past 141 trading days on July 4th. Oil for August delivery went down as low as $48.54 per barrel and closed at $48.65, losing 0.75% compared to Friday’s close. As of 8:03 GMT today the commodity was down 2.45% to trade at $47.79, after going down as low as $47.78 per barrel earlier. The latter has been the lowest price level since June 28th.
On Tuesday USD/CAD trading may be influenced by the following macroeconomic reports and other events as listed below.
Fundamentals
Factory Orders
The total value of factory orders in the United States probably shrank 1.0% in May compared to April, according to the median estimate by experts, following an unrevised 1.9% surge in the preceding month. The latter has been the steepest increase since June 2015, when factory orders went up 2.2%. In April, orders for non-defense capital goods excluding aircraft, a gauge of business confidence and spending plans, shrank 0.6% compared to a 0.8% decrease, as reported in the preceding month.
Excluding the sector of transportation, factory orders went up 0.5% in April from a month ago, while extending gains in March.
The general index reflects the total value of new purchase orders, placed at manufacturers for durable and non-durable goods, and can provide insight into inflation and growth in the US sector of manufacturing. In case the general index of new orders decreased at a faster-than-anticipated rate, this would trigger a moderate bearish impulse for the US dollar, as it implies future growth deceleration. The US Census Bureau will release the official data at 14:00 GMT.
Feds Dudley Speech
At 18:30 GMT the Fed President for New York and also a FOMC member, William Dudley, is expected to take a statement. Any remarks in relation to the US macroeconomic outlook, or the Banks monetary policy stance will certainly heighten USD volatility.
Bond Yield Spread
The yield on Canada’s 2-year government bonds went as high as 0.519% on July 4th, after which it closed at 0.517% to remain unchanged compared to July 1st.
Meanwhile, the yield on US 2-year government bonds climbed as high as 0.597% on July 4th, after which it fell to 0.589% at the close to lose 0.008 percentage point compared to July 1st.
The spread between 2-year US and 2-year Canadian bond yields, which reflects the flow of funds in a short term, narrowed to 0.072% on July 4th from 0.080% on July 1st. The July 4th yield spread has been the lowest one since June 30th, when the difference was 0.069%.
Daily, Weekly and Monthly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for USD/CAD are presented as follows:
R1 – 1.2853
R2 – 1.2861
R3 (range resistance) – 1.2869
R4 (range breakout) – 1.2894
S1 – 1.2837
S2 – 1.2829
S3 (range support) – 1.2821
S4 (range breakout) – 1.2796
By using the traditional method of calculation, the weekly pivot levels for USD/CAD are presented as follows:
Central Pivot Point – 1.2963
R1 – 1.3068
R2 – 1.3225
R3 – 1.3330
S1 – 1.2806
S2 – 1.2701
S3 – 1.2544
In monthly terms, for USD/CAD we have the following pivots:
Central Pivot Point – 1.2950
R1 – 1.2987
R2 – 1.3050
R3 – 1.3087
S1 – 1.2887
S2 – 1.2850
S3 – 1.2787
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