Forex Market: USD/CAD daily trading outlook

Yesterday’s trade saw USD/CAD within the range of 1.2711 – 1.2572. The pair closed 0.53% lower at 1.2621, ending three sessions of gains.

At 6:43 GMT today USD/CAD was down 0.20% for the day to trade at 1.2597. The pair held in a daily range of 1.2586 – 1.2628.

Fundamental view

United States

The number of people in the United States who filed for unemployment assistance for the first time during the week ended March 28th probably rose to 285 000 from 282 000 in the prior week. Initial jobless claims is a short-term indicator, reflecting lay-offs in the country. In case the number of claims rose more than projected, this would have a bearish effect on the greenback.

The number of continuing jobless claims probably fell to the seasonally adjusted 2 405 000 in the week ended March 21st from 2 416 000 a week earlier. This indicator reflects the actual number of people unemployed and currently receiving jobless benefits who filed for unemployment assistance at least two weeks ago. The Labor Department releases the report at 12:30 GMT.

Meanwhile, the deficit on US balance of trade probably narrowed to $41.20 billion in February from a trade gap of -$41.80 billion registered in January.

The trade balance measures the difference in value between the country’s exported and imported goods and services during the reported period. It reflects the net export of goods and services, or one of the components to form the Gross Domestic Product. Generally speaking, exports are linked to economic growth, while imports indicate how strong domestic demand is. In case the trade balance deficit shrank more than anticipated, this would suggest higher demand for the greenback. The Bureau of Economic Analysis will release the official trade data at 12:30 GMT.

Also due today, factory orders in the United States probably dropped 0.5% in February from a month earlier, following a 0.2% decline in January. If confirmed, this would be the seventh straight month of contraction. This indicator presents the total value of new purchase orders placed at manufacturers for durable and non-durable goods, and can provide insight into inflation and growth in US manufacturing sector. In case new orders dropped more than anticipated, this would have a bearish effect on the greenback. The US Census Bureau will release the official data at 14:00 GMT.

Canada

The deficit on Canadian balance of trade probably narrowed to CAD 1.80 billion in February from CAD 2.45 billion in January, according to the median estimate by experts, following an upward revised deficit figure of CAD 1.22 billion in December. In case the trade balance deficit shrank more than expected, this would have a bullish effect on the Canadian dollar. Statistics Canada will release the official trade data at 12:30 GMT.

Pivot points

According to Binary Tribune’s daily analysis, the pair’s central pivot point stands at 1.2635. In case it penetrates the first resistance level at 1.2697, it will encounter next resistance at 1.2774. If breached, upside movement may attempt to advance to 1.2836.

If the cross drops below its S1 level at 1.2558, it will next see support at 1.2496. If the second key support zone is breached, downward movement may extend to 1.2419.

In weekly terms, the central pivot point is at 1.2546. The three key resistance levels are as follows: R1 – 1.2687, R2 – 1.2763, R3 – 1.2904. The three key support levels are: S1 – 1.2470, S2 – 1.2329, S3 – 1.2253.