Forex Market: USD/CAD daily trading forecast

Yesterday’s trade saw USD/CAD within the range of 1.1203-1.1264. The pair closed at 1.1229, losing 0.08% on a daily basis.

At 7:53 GMT today USD/CAD was down 0.12% for the day to trade at 1.1218. The pair touched a daily low at 1.1214 at 3:50 GMT.

Fundamentals

United States

Sales of new single-family homes probably declined 5.8% to the seasonally adjusted annual rate of 470 000 during September compared to a month ago, according to market expectations. The index of new home sales surged 18.0% to the annual rate of 504 000 in August, which has been the highest level since May 2008. The median sales price of new houses sold in August was 275 600 USD, while the average sales price was 347 900 USD. The seasonally adjusted estimate of new houses for sale at the end of August was 203 000, which represents a supply of 4.8 months at the current sales rate, according to the report by the US Census Bureau.

There are several points to watch out for when interpreting the New Home Sales numbers. First of all, the statistics does not record any houses that are not going to be sold immediately. As an example, the case when a house is commissioned to be built on an existing plot of land, that the purchaser owns.

Second, the statistics are taken at the point where a customer has signed a sales contract or has put a deposit down. At this point the house can be at any stage of construction.

Third, the sales figures are not adjusted to take into account the sales contracts, which are eventually canceled by the builder or the customer. However, the same house is not included in any subsequent count when it is eventually sold to another customer.

This report has a significant influence on the Forex market, because increasing new home sales can lead to a rise in consumption, for example. The new home sales index is also an excellent indicator of any economic downturns or upturns due to the sensitivity of consumers income. When, for instance, new home sales drop over several months, this usually is a precursor to an economic depression.

Therefore, in case the index fell more than anticipated, this would usually mount selling pressure on the greenback. The Census Bureau is to report the official figure at 14:00 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.1232. In case USD/CAD manages to breach the first resistance level at 1.1261, it will probably continue up to test 1.1293. In case the second key resistance is broken, the pair will probably attempt to advance to 1.1322.

If USD/CAD manages to breach the first key support at 1.1200, it will probably continue to slide and test 1.1171. With this second key support broken, the movement to the downside will probably continue to 1.1139.

The mid-Pivot levels for today are as follows: M1 – 1.1155, M2 – 1.1186, M3 – 1.1216, M4 – 1.1247, M5 – 1.1277, M6 – 1.1308.

In weekly terms, the central pivot point is at 1.1278. The three key resistance levels are as follows: R1 – 1.1387, R2 – 1.1497, R3 – 1.1606. The three key support levels are: S1 – 1.1168, S2 – 1.1059, S3 – 1.0949.