Forex Market: USD/CAD daily forecast

During yesterday’s trading session USD/CAD traded within the range of 1.0711-1.0746 and closed at 1.0732.

At 11:07 GMT today USD/CAD was losing 0.06% for the day to trade at 1.0723. The pair touched a daily high at 1.0718 at 9:20 GMT.

Fundamental view

United States

The number of people in the United States, who filed for unemployment assistance for the first time during the week ended on July 19th, probably increased to 310 000 from 302 000 during the prior week. This is a short-term indicator, reflecting lay-offs in the country. In case the number of initial jobless claims rose less than projected, this would have a bullish effect on the greenback. The Department of Labor is to release the weekly report at 12:30 GMT.

At the same time, activity in United States’ manufacturing sector probably continued to expand during July, with the corresponding manufacturing PMI coming in at a reading of 57.5, according to expectations, from 57.3 in June. The Manufacturing Purchasing Managers’ Index (PMI) is a compound index, which represents manufacturing activity in 20 different industries. It is comprised by four equally-weighted components: seasonally adjusted employment, seasonally adjusted production inventories, seasonally adjusted new orders and supplier deliveries. The index is based on a survey of 300 purchasing managers.

If 100% of the respondents saw no change in conditions, the index will show a reading of 50.0. Therefore, readings above the key level of 50.0 are indicative of expanding activity in the sector of manufacturing, which usually supports the US dollar. The market research group Markit Economics is to release the official reading at 13:45 GMT.

In addition, at 14:00 GMT United States’ Census Bureau is to announce the results from the Survey of Construction, regarding sales of new, privately-owned residential buildings currently authorized by a building permit or started in areas not requiring a building permit. New home sales in the country probably declined by 5.3% to 0.475 million last month from 0.504 million in May.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.0730. In case USD/CAD manages to breach the first resistance level at 1.0748, it will probably continue up to test 1.0765. In case the second key resistance is broken, the pair will probably attempt to advance to 1.0783.

If USD/CAD manages to breach the first key support at 1.0713, it will probably continue to slide and test 1.0695. With this second key support broken, the movement to the downside will probably continue to 1.0678.