Forex Market: USD/CAD daily trading forecast

Yesterday’s trade saw USD/CAD within the range of 1.2426-1.2549. The daily low has also been the lowest level since March 5th, when a low of 1.2405 was recorded. The pair closed at 1.2494, down 0.24% on a daily basis and marking a third consecutive daily loss.

At 9:12 GMT today USD/CAD was down 0.02% for the day to trade at 1.2492. The pair touched a daily low at 1.2483 at 8:48 GMT.

Fundamentals

United States

Durable Goods Orders

Durable goods orders in the United States probably increased 0.4% in February compared to a month ago, according to the median forecast by experts. In January new orders for manufactured durable goods went up at a pace of 2.8% to reach USD 236.1 billion, which followed two months of declines.

Shipments of manufactured durable goods shrank USD 2.7 billion, 1.1% to USD 245.1 billion in January, following a 1.5% increase in December. Inventories of manufactured durable goods increased USD 1.8 billion, 0.4% to USD 412.5 billion during the same month. This has been the highest level since the series was first published on a NAICS basis in 1992. In December inventories rose 0.5%. Unfilled orders for manufactured durable goods decreased USD 2.0 billion, 0.2% to USD 1 163.4 billion in January, following a 0.9% drop in December, according to data by the US Census Bureau.

Durable goods orders, as an indicator, gauge the strength of US manufacturing sector and represent a major portion of the nations factory orders. This is a closely watched report on manufacturing activity, because durable goods are the first type of goods to be affected by an economic downturn or upturn.

Durable goods are designed to last three or more years and encompass aircraft, automobiles and buses, cranes, machine parts, appliances etc. More than 85 industries are represented in the sample, which covers the entire United States. The logic behind this indicator is that consumers need to be very optimistic in order to buy an automobile in comparison with, for example, first necessities such as food or clothing. Therefore, durable goods are among the first goods, which a consumer may abstain from purchasing, in case overall economic activity begins to contract. The same is valid for company purchases. During a recession, an airliner is less likely to purchase new planes and as factory output contracts, it is less likely to purchase new machines.

Durable goods orders, which exclude transportation, probably rose 0.3% in February. In January orders were up another 0.3%, following three consecutive months of declines. Large ticket orders, such as automobiles for civil use or aircraft, are not present in the calculation, as their value may be in a wide range. This way the index provides a more reliable information in regard to orders for durable goods.

In case orders increased at a faster-than-projected pace, this would certainly have a bullish effect on the greenback. The US Census Bureau is scheduled to release the official data at 12:30 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.2490. In case USD/CAD manages to breach the first resistance level at 1.2553, it will probably continue up to test 1.2613. In case the second key resistance is broken, the pair will probably attempt to advance to 1.2676.

If USD/CAD manages to breach the first key support at 1.2430, it will probably continue to slide and test 1.2367. With this second key support broken, the movement to the downside will probably continue to 1.2307.

The mid-Pivot levels for today are as follows: M1 – 1.2337, M2 – 1.2399, M3 – 1.2460, M4 – 1.2522, M5 – 1.2583, M6 – 1.2645.

In weekly terms, the central pivot point is at 1.2620. The three key resistance levels are as follows: R1 – 1.2767, R2 – 1.2982, R3 – 1.3129. The three key support levels are: S1 – 1.2405, S2 – 1.2258, S3 – 1.2043.