Forex Market: USD/CAD daily forecast

During yesterday’s trading session USD/CAD traded within the range of 1.0913-1.0986 and closed at 1.0919, losing 0.4% for the day.

At 10:50 GMT today USD/CAD was adding 0.06% for the day to trade at 1.0922. The pair touched a daily high at 1.0938 at 7:45 GMT.

Fundamental view

United States

The initial jobless claims in the US probably rose to 304 000 in the week ended August 2nd, according to the median estimate by experts, from 302 000 a week ago.

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. Initial application or (Initial Claim) means a completed document from an unemployed person before the local government, which is considered a claim for compensation or the possibility of compensation. The completion of the initial claim marks the beginning of a period in which the applicant receives unemployment benefits. The survey covers the number of applications registered in the previous week and is an important indicator concerning the health of the US labor market.

The statistical arm of the US Department of Labor will release an official report at 12:30 GMT today. If jobless claims rose less than expected, this will provide support for the US dollar.

Canada

The number of building permits in the country probably contracted 1.4% in June compared to a month ago, according to the median estimate by experts. In May permits issued by the government surged 13.8%, the most since July 2013. Building permits, as an indicator, provide information regarding demand in Canada’s housing market. A higher than anticipated number would be supportive for the Canadian dollar. Statistics Canada is to release its monthly report at 12:30 GMT.

At the same time, activity among purchasing managers in Canada probably increased in July, with the corresponding PMI coming in at a seasonally adjusted value of 54.1. In June the index unexpectedly declined to 46.9, signaling a contraction in the sector. Junes reading was also the weakest since December 2013.

This indicator is based on a survey sponsored by Richard Ivey School of Business and Canadian Purchasing Management Association. It encompasses 175 respondents in both public and the private sector, selected in accordance with their geographic location and activity, so that the entire economy is covered. Activity among purchasing managers is closely watched by market players, as managers usually have an early access to data regarding performance of their companies, which could be used as a leading indicator of overall economic activity.

Readings above the key level of 50.0 are indicative of expansion in activity. Higher than expected readings of the PMI would bolster demand for the loonie. The official result is due out at 14:00 GMT.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.0939. In case USD/CAD manages to breach the first resistance level at 1.0966, it will probably continue up to test 1.1012. In case the second key resistance is broken, the pair will probably attempt to advance to 1.1039.

If USD/CAD manages to breach the first key support at 1.0893, it will probably continue to slide and test 1.0866. With this second key support broken, the movement to the downside will probably continue to 1.0820.

In weekly terms, the central pivot point is at 1.0886. The three key resistance levels are as follows: R1 – 1.0975, R2 – 1.1033, R3 – 1.1122. The three key support levels are: S1 – 1.0828, S2 – 1.0739, S3 – 1.0681.