Forex Market: USD/CAD daily forecast

During yesterday’s trading session USD/CAD traded within the range of 1.0844-1.0887 and closed at 1.0872.

At 9:19 GMT today USD/CAD was losing 0.03% for the day to trade at 1.0872. The pair touched a daily low at 1.0856 at 6:15 GMT.

Fundamental view

United States

The initial jobless claims in the US probably fell to 317 000 in the week ended May 24, from 326 000 a week ago, according to the median estimate by experts. The indicator measures the number of applications for unemployment benefits that are recorded each week in a report prepared by the Bureau of Labor Statistics in the United States. The data is due out at 12:30 GMT. In case initial jobless claims fell more than expected, this will boost demand for the US dollar.

In addition, United States’ preliminary (revised) annualized Gross Domestic Product probably shrank 0.5% during the first quarter of 2014, following an advance 0.1% gain, announced on April 30.

This is the widest indicator for nation’s economic activity. A larger than expected increase in theGDP figure would boost demand for the US dollar. The official result is to be released at 12:30 GMT.

Moreover, the index of pending home sales in the United States probably rose by 1% in April compared to March, when sales unexpectedly jumped 3.4%. This indicator shows activity in terms of signing contracts for purchases of existing single-family houses. Actual payments are made one to two months after the contract has been signed. The index was started in 2001 and its base value was set at 100 points. The index of pending sales is built on broad national sample covering about 20% of the transactions of existing home sales.

The National Association of Realtor’s (NAR) will announce the official index value at 14:00 GMT. A higher-than-projected gain will support greenback’s demand.

Canada

Canada’s Current Account deficit probably narrowed to 13 billion CAD in the first quarter from 16 billion CAD deficit in the last quarter of 2013.

The indicator monitors transactions between Canadian and foreign nationals, allocated respectively between the current account, the capital account and financial account. Transactions represent changes in the total value of transfers between Canadian and foreign market units, from Canadian perspective. They can be in the form of goods, services, investment income and other financial sources. Transactions are recorded using a dual accounting system that automatically takes into account all of them. The double effect is in the determination of the sender and the recipient of each transfer. The minus sign is used to import transactions or outflow of capital abroad, which increased assets abroad. With plus sign is marked exports or capital investments, which are carried out by foreign economic units.

Statistics Canada will release an official report at 12:30 GMT. In case, the nation’s deficit narrowed more than expected, this would boost loonie’s demand.

Technical view

According to Binary Tribune’s daily analysis, in case USD/CAD manages to breach the first resistance level at 1.0891, it will probably continue up to test 1.0911. In case the second key resistance is broken, the pair will probably attempt to advance to 1.0934.

If USD/CAD manages to breach the first key support at 1.0848, it will probably continue to slide and test 1.0825. With this second key support broken, the movement to the downside will probably continue to 1.0805.