Forex Market: USD/CAD daily trading forecast

Yesterday’s trade saw USD/CAD within the range of 1.2899-1.3013. The pair closed at 1.2996, gaining 0.41% on a daily basis. It has been the first gain in the past three trading days. The daily low was a test of the low from Friday, while the latter has been the lowest level since July 29th, when a low of 1.2859 was recorded.

At 11:52 GMT today USD/CAD was gaining 0.45% for the day to trade at 1.3055. The pair touched a daily high at 1.3067 at 11:42 GMT. It has been a third test of that level for today, while a strong resistance area was formed within 1.3060-1.3070.

Today USD/CAD may be influenced by the following macroeconomic reports.

Fundamentals

United States

Budget Statement

The United States probably recorded a government budget surplus of USD 95.0 billion in September, according to market expectations, after a deficit of USD 64.4 billion during the previous month. The latter represented a 50% decrease compared to August a year ago.

In August total receipts were at USD 211 billion (an 8.8% year-on-year increase), while total outlays amounted to USD 275 billion (a 14.9% year-on-year drop).

Spending for military active duty and retirement, veteran’s benefits, supplemental security income, and Medicare payments to Health Maintenance Organizations and prescription drug plans were accelerated into July, as August 1st 2015, the normal payment date, fell on a non-business day, according to the report by the US Treasury. The year-to-date budget deficit was at USD 211 billion.

A larger-than-projected budget surplus would have a moderate bullish effect on the greenback. The Financial Management Service is to publish the official figure at 18:00 GMT.

Bond Yields

The yield on US 2-year government bonds climbed as high as 0.641% on October 12th, after which it fell to 0.637% at the close to lose 0.004 percentage point compared to October 9th. It has been the first drop in the past four trading days.

Meanwhile, the yield on US 10-year government bonds climbed as high as 2.074% on October 12th, after which it slipped to 2.070% at the close to lose 2 basis points (0.02 percentage point) compared to October 9th, while marking a second consecutive trading day of decline.

Canadian bond markets remained closed on Monday for the Thanksgiving holiday.

Daily and Weekly Pivot Levels

By employing the Camarilla calculation method, the daily pivot levels for USD/CAD are presented as follows:

R1 – 1.3006
R2 – 1.3017
R3 (range resistance) – 1.3027
R4 (range breakout) – 1.3059

S1 – 1.2986
S2 – 1.2975
S3 (range support) – 1.2965
S4 (range breakout) – 1.2933

By using the traditional method of calculation, the weekly pivot levels for USD/CAD are presented as follows:

Central Pivot Point – 1.3005
R1 – 1.3114
R2 – 1.3284
R3 – 1.3393

S1 – 1.2835
S2 – 1.2726
S3 – 1.2556