Yesterday’s trade saw USD/CAD within the range of 1.3022-1.3137. The pair closed at 1.3035, falling 0.40% on a daily basis, while marking the fifth consecutive trading day of losses. The daily low has been the lowest level since September 18th, when a low of 1.3007 was recorded.
At 9:05 GMT today USD/CAD was losing 0.13% for the day to trade at 1.3016. The pair touched a daily low at 1.2993 at 8:25 GMT. It has been the lowest level since August 13th, when a daily low of 1.2955 was reached. The latter may be a possible level of support. If broken, USD/CAD may target 1.2941, the weekly S2 level.
Today the cross may be influenced by a number of macroeconomic reports as listed below.
Fundamentals
United States
Consumer credit change
The money amounts, borrowed by consumers probably decreased to USD 19.0 billion in August, according to market expectations, from USD 19.1 billion in July. Given the current state of the economy, a higher-than-expected amount borrowed is usually considered as dollar positive, as it implies a potential increase in consumer spending and accelerated growth, respectively. The Board of Governors of the Federal Reserve is to release the official numbers at 19:00 GMT.
Canada
Building Permits
The number of building permits in Canada probably rose 0.5% in August compared to a month ago, according to the median estimate by experts. In July permits, issued by the government, were 0.6% fewer. Building permits, as an indicator, provide information regarding demand in Canada’s housing market. In case the number of permits rose more than anticipated, this might have a limited bullish effect on the Canadian dollar. Statistics Canada is to release its monthly report at 12:30 GMT.
Bond Yield Spread
The yield on Canadian 2-year government bonds went as high as 0.518% on October 6th, after which it slid to 0.508% at the close to lose 0.005 percentage point compared to October 5th.
The yield on US 2-year government bonds climbed as high as 0.613% on October 6th, after which it fell to 0.605% at the close to lose 0.004 percentage point compared to October 5th.
The spread between 2-year US and 2-year Canadian bond yields, which reflects the flow of funds in a short term, widened to 0.097% on October 6th from 0.096% on October 5th. The October 6th yield difference has been the largest one since October 1st, when the spread was 0.120%.
Meanwhile, the yield on Canadian 10-year government bonds soared as high as 1.469% on October 6th, or the highest level since September 30th (1.484%), after which it closed at 1.421% to lose 2.2 basis points (0.022 percentage point) compared to October 5th. It has been the sixth drop in the past seven trading days.
The yield on US 10-year government bonds climbed as high as 2.077% on October 6th, or the highest level since September 30th (2.104%), after which it slipped to 2.035% at the close to lose 2.3 basis points (0.023 percentage point) compared to October 5th.
The spread between 10-year US and 10-year Canadian bond yields expanded to 0.614% on October 6th from 0.615% on October 5th. The October 6th yield difference has been the lowest one since October 2nd, when the spread was 0.588%.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for USD/CAD are presented as follows:
R1 – 1.3046
R2 – 1.3056
R3 (range resistance) – 1.3067
R4 (range breakout) – 1.3098
S1 – 1.3024
S2 – 1.3014
S3 (range support) – 1.3003
S4 (range breakout) – 1.2972
By using the traditional method of calculation, the weekly pivot levels for USD/CAD are presented as follows:
Central Pivot Point – 1.3251
R1 – 1.3355
R2 – 1.3561
R3 – 1.3665
S1 – 1.3045
S2 – 1.2941
S3 – 1.2735
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