Forex Market: USD/CAD daily trading forecast

During yesterday’s trading session saw USD/CAD trading within the range of 1.0953-1.0829, the lowest since July 29th. The pair closed at 1.0869, down 0.75% on the day.

At 9:19 GMT today USD/CAD was down 0.13% to trade at 1.0850. The cross fell to a daily low at 1.0843 touched at 8:20 GMT, while day’s high stood at 1.0869.

Fundamental view

United States

The US Department of Commerce will release its revised preliminary reading on US GDP growth at 12:30 GMT. According to analysts’ projections, the world’s biggest economy probably expanded by 3.9% in the second quarter, compared to the initial reading of 4.0% and the first quarter’s 2.1% contraction.

The GDP represents the total monetary value of all goods and services produced by one nation over a specific period of time. What is more, it is the broadest indicator of a country’s economic activity. The report on GDP holds a lot of weight for traders, operating in the Foreign Exchange Market. It serves as evidence of growth in a productive economy, or as evidence of contraction in an unproductive one. As a result, currency traders will look for higher rates of growth as a sign that interest rates will follow the same direction. Higher interest rates will attract more investors, willing to purchase assets in the country, while, at the same time, this will increase demand for the national currency.

Separately, the Labor Department is expected to report that the number of people who filed for initial unemployment benefits in the week ended August 23rd rose to 300 000, up by 2 000 from the preceding period.

Additionally, the index of pending home sales in the United States probably rose 0.5% during July compared to June, when sales unexpectedly dropped by 1.1%..

When a sales contract is accepted for a property, it is recorded as a pending home sale. As an indicator, the index provides information on the number of future home sales, which are in the pipeline. It gathers data from real estate agents and brokers at the point of a sale of contract and is currently the most accurate indicator regarding US housing sector. It samples over 20% of the market. In addition, over 80% of pending house sales are converted to actual home sales within 2 or 3 months. Therefore, this index has a predictive value about actual home sales.

The National Association of Realtors (NAR) will release the official index value at 14:00 GMT. In case pending home sales increased more than anticipated, this would have a bullish effect on the greenback.

Canada

Canadas current account deficit probably narrowed to 12.0 billion Canadian dollars in the second quarter from 12.4 billion in the preceding three months, Statistics Canada will report at 12:30 GMT.

The current account represents the net flow of current transactions, which includes goods, services and interest payments. It basically measures the difference in value between imported and exported goods, services and interest payments during the tracked period. The imported and exported goods balance is the so-called Balance of Trade. A positive current account value means we have a current account surplus, which indicates that the flow of capital into Canada is higher than the outflow, thus demand for the national currency should be rising. Therefore, a growing current account surplus or a narrowing deficit are generally seen as bullish for CAD, and vice versa.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.0884. In case USD/CAD manages to breach the first resistance level at 1.0938, it will probably continue up to test 1.1008. In case the second key resistance is broken, the pair will probably attempt to advance to 1.1062.

If USD/CAD manages to breach the first key support at 1.0814, it will probably continue to slide and test 1.0760. With this second key support broken, movement to the downside will probably continue to 1.0690.

The mid-Pivot levels for today are as follows: M1 – 1.0725, M2 – 1.0787, M3 – 1.0849, M4 – 1.0911, M5 – 1.0973, M6 – 1.1035.

In weekly terms, the central pivot point is at 1.0936. The three key resistance levels are as follows: R1 – 1.0995, R2 – 1.1046, R3 – 1.1105. The three key support levels are: S1 – 1.0885, S2 – 1.0826, S3 – 1.0775.