During yesterday’s trading session USD/CAD traded within the range of 1.0868-1.0837 and closed at 1.0857, down 0.11% on the day.
At 9:54 GMT today USD/CAD was down 0.08% to trade at 1.0852. The pair held in a daily range between 1.0848 and 1.0863.
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.
Canadian Gross Domestic Product (GDP) probably expanded by 0.3% in June on a monthly basis, according to the median forecast by experts, following another 0.4% increase in May. Canadas economy probably grew at an annualized pace of 3.0% in the second quarter, following a 1.2% growth in Q1. Quarter-on-quarter, the Canadian economy probably grew by 0.7%, up from 0.3% during the first three months.
If an economy is experiencing a robust rate of growth, the benefits will eventually affect the end consumer, because of the increased likelihood of spending, while through increased consumer expenditures economy has the potential to expand even further. Therefore, in case Canadian growth outpaced expectations, this would heighten the appeal of Canadian dollar. Statistics Canada is expected to release the official figure at 12:30 GMT.
The statistics agency is also expected to report that its Raw Materials Price Index (RMPI) rose by 3.0% on an annual basis in July, compared to 9.2% in June, while contracting by 1.0% on a monthly basis following Junes 1.1% jump.
The RMPI measures the changes in prices paid by Canadian manufacturers for raw materials. It also includes goods that are not produced in Canada. Its impact on the local currency can be two-sided.
Statistics Canada is also projected to report that its Industrial Product Price Index (IPPI) surged by an annualized 3.0% in July, the same as in June, while marking a 0.2% advance on a monthly basis, compared to Junes 0.1% contraction.
IPPI measures the changes in prices of goods sold only by domestic manufacturers. In general, an improving or a better-than-expected reading is seen as bullish for the Canadian dollar.
According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.0854. In case USD/CAD manages to breach the first resistance level at 1.0871, it will probably continue up to test 1.0885. In case the second key resistance is broken, the pair will probably attempt to advance to 1.0902.
If USD/CAD manages to breach the first key support at 1.0840, it will probably continue to slide and test 1.0823. With this second key support broken, movement to the downside will probably continue to 1.0809.
The mid-Pivot levels for today are as follows: M1 – 1.0816, M2 – 1.0832, M3 – 1.0847, M4 – 1.0863, M5 – 1.0878, M6 – 1.0894.
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.