Forex Market: USD/CAD daily trading forecast

Yesterday’s trade saw USD/CAD within the range of 1.1225-1.1313. The pair closed at 1.1289, gaining 0.51% on a daily basis.

At 8:11 GMT today USD/CAD was up 0.13% for the day to trade at 1.1297. The pair touched a daily high at 1.1308 at 7:45 GMT.

Fundamentals

United States

Gross Domestic Product – second estimate

The second estimate of the US Gross Domestic Product probably pointed to an annualized rate of growth of 3.3% in the third quarter of the year, according to the median forecast by analysts. The preliminary GDP estimate for Q3, reported on October 30th, pointed to an annual growth of 3.5%. In Q2 economy expanded at an annualized rate of 4.6%, according to final data, or the most since Q4 2010, when the GDP grew 5.6%. The preliminary estimate showed a downturn in inventory, residential and nonresidential investment and deceleration in personal consumption, exports and state and local public spending. Real personal consumption expenditures rose 1.8% during the third quarter, compared with a 2.5% growth in Q2. Real nonresidential fixed investment expanded 5.5% in Q3, compared with an increase of 9.7% in the second quarter. Real exports of goods and services were up 7.8% in the third quarter, after they rose 11.1% in Q2. Real federal government consumption expenditures and gross investment expanded 10.0% during the quarter, following a decrease of 0.9% in Q2, according to data by the US Department of Commerce.

Currency traders will usually look for higher rates of growth as a sign that interest rates will follow the same direction. Higher interest rates will attract more investors, which will increase demand for the US dollar. 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. Furthermore, through increased consumer expenditures the economy has the potential to expand even more. In case the second GDP estimate outpaced expectations, this would certainly heighten the appeal of the greenback. The official data is due out at 13:30 GMT.

Consumer confidence

Confidence among consumers in the United States probably continued to improve in November, with the corresponding index coming in at a reading of 96.0 from 94.5 in October. If so, this would be the highest index value since September 2007, when the gauge was reported at 99.5.

This indicator measures the level of individuals confidence in the US economic activity. It is considered as a leading indicator, as it gives an early insight into consumer spending, which accounts for most of the nations GDP. Confidence is measured on a scale of -100 to +100. A reading of -100 implies a lack of confidence, while a reading of 100 is indicative of extremely high confidence. Zero values imply neutrality. In case the index improved more than anticipated, this might provide support to the US dollar, as higher confidence suggests greater willingness to spend and, respectively, accelerated economic growth. The Conference Board research group is to publish the official index reading at 15:00 GMT.

Canada

Retail sales in Canada probably increased 0.5% in September on a monthly basis, according to the median forecast by experts. If so, this would be the fastest monthly rate of increase since June. In August compared to July sales dropped 0.3%. Retail sales, excluding sales of automobiles, probably expanded 0.4% in September compared to August, following a 0.3% drop in the preceding month. Large-ticket purchases are excluded due to their high volatility, which could influence the general trend. In case retail sales increased more than anticipated, this would support the Canadian dollar. Statistics Canada is to release the official figure at 13:30 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.1276. In case USD/CAD manages to breach the first resistance level at 1.1326, it will probably continue up to test 1.1364. In case the second key resistance is broken, the pair will probably attempt to advance to 1.1414.

If USD/CAD manages to breach the first key support at 1.1238, it will probably continue to slide and test 1.1188. With this second key support broken, the movement to the downside will probably continue to 1.1150.

The mid-Pivot levels for today are as follows: M1 – 1.1169, M2 – 1.1213, M3 – 1.1257, M4 – 1.1301, M5 – 1.1345, M6 – 1.1389.

In weekly terms, the central pivot point is at 1.1263. The three key resistance levels are as follows: R1 – 1.1337, R2 – 1.1443, R3 – 1.1517. The three key support levels are: S1 – 1.1157, S2 – 1.1083, S3 – 1.0977.