Forex Market: USD/CAD daily trading forecast

Yesterday’s trade saw USD/CAD within the range of 1.1609-1.1624. The pair closed at 1.1617, losing 0.03% on a daily basis.

At 10:57 GMT today USD/CAD was up 0.34% for the day to trade at 1.1658. The pair broke all three key daily resistances and touched a daily high at 1.1667 at 10:30 GMT. So far during the trading day, the upside movement was halted in proximity to the first key weekly resistance.

Fundamentals

United States

ISM Manufacturing data

Activity in United States’ manufacturing sector probably slowed down in December, with the corresponding manufacturing Purchasing Managers Index coming in at a reading of 57.6, according to expectations, from 58.7 in November. If so, this would be the lowest PMI value since September, when the indicator was registered at 56.6.

The Manufacturing Purchasing Managers’ Index (PMI) is a compound index, which represents manufacturing activity in 18 different industries. It is comprised by four equally-weighted components: seasonally adjusted employment, seasonally adjusted production inventories, seasonally adjusted new orders and supplier deliveries. The index is based on a survey of 300 purchasing managers.

Participants can either respond with “better”, “same”, or “worse” to the questions about the industry, in which they operate. The resulting PMI value is measured from 0 to 100. If the index shows a value of 100.0, this means that 100% of the respondents reported an improvement in conditions. If the index shows a value of 0, this means that 100% or the respondents reported a deterioration in conditions. If 100% of the respondents saw no change in conditions, the index will show a reading of 50.0. Therefore, readings above the key level of 50.0 are indicative of expanding activity in the sector of manufacturing. In case the PMI slowed down more than anticipated, this would certainly have a bearish effect on the greenback. The Institute for Supply Management (ISM) is to release the official reading at 15:00 GMT.

Canada

RBC Manufacturing PMI

Canadian Manufacturing PMI probably slowed down to 53.8 in December, according to the median analysts’ estimate, from 55.3 in the prior month. If so, this would be the lowest PMI reading since September, when the index was reported at 53.5.

The PMI report is based on data collected from monthly replies to questionnaires sent to supply managers in over 400 industrial companies. The PMI is a compound index based on five individual indexes: new orders, production, employment, delivery time, stocks of purchases. Values of the index above the key level of 50.0 indicate overall increase in activity in the sector, while readings below 50.0 are indicative of contraction in activity. PMI studies are earlier indicators of economic conditions published on a monthly basis and are available much before the publication of relevant data from government authorities. In case activity in the sector slowed down more than expected, this would have a bearish effect on the loonie. Royal Bank of Canada (RBC) will release the official PMI data at 14:30 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.1617. In case USD/CAD manages to breach the first resistance level at 1.1624, it will probably continue up to test 1.1632. In case the second key resistance is broken, the pair will probably attempt to advance to 1.1639.

If USD/CAD manages to breach the first key support at 1.1609, it will probably continue to slide and test 1.1602. With this second key support broken, the movement to the downside will probably continue to 1.1594.

The mid-Pivot levels for today are as follows: M1 – 1.1598, M2 – 1.1606, M3 – 1.1613, M4 – 1.1621, M5 – 1.1628, M6 – 1.1636.

In weekly terms, the central pivot point is at 1.1623. The three key resistance levels are as follows: R1 – 1.1670, R2 – 1.1715, R3 – 1.1762. The three key support levels are: S1 – 1.1578, S2 – 1.1531, S3 – 1.1486.