Forex Market: USD/CAD daily trading outlook

Yesterday’s trade saw USD/CAD within the range of 1.3829-1.3928. The pair closed at 1.3874, going up 0.27% on a daily basis, while marking its third gain in the past seven trading days. The loonie has depreciated 3.97% against the greenback so far during the current month.

At 9:48 GMT today USD/CAD was gaining 0.16% for the day to trade at 1.3895. The pair touched a daily high at 1.3902 at 9:21 GMT, marking its second attempt to break above the psychological 1.3900 level in the past two trading days. Resistance may be encountered within the 1.3927-1.3940 area, while support may be received at the low from December 30th (1.3829).

On Thursday USD/CAD trading may be influenced by a number of macroeconomic reports as listed below.

Fundamentals

United States

Initial, Continuing Jobless Claims

The number of people in the United States, who filed for unemployment assistance for the first time during the business week ended on December 25th, probably increased to 270 000, according to market expectations, from 267 000 reported in the preceding week. The latter has been the lowest number of claims since the business week ended on November 20th, when a figure of 260 000 was reported.

The 4-week moving average, an indicator lacking seasonal effects, was 272 500, marking an increase by 1 750 compared to the preceding weeks revised up average.

The business week, which ended on December 18th has been the 42nd consecutive week, when jobless claims stood below the 300 000 threshold, which implied a healthy labor market.

Initial jobless claims number is a short-term indicator, reflecting lay-offs in the country. In case the number of claims met expectations or increased further, this would have a moderate bearish effect on the US dollar.

The number of continuing jobless claims probably rose to the seasonally adjusted 2 201 000 during the business week ended on December 18th from 2 195 000 in the preceding week. The latter represented a drop by 47 000 compared to the revised up number of claims reported in the week ended on December 4th. This indicator reflects the actual number of people unemployed and currently receiving unemployment benefits, who filed for unemployment assistance at least two weeks ago.

The Department of Labor is to release the weekly report at 13:30 GMT.

Chicago Manufacturing PMI

The Chicago Purchasing Managers Index (PMI) probably improved to a reading of 49.8 in December, according to market expectations, from 48.7 during the prior month. The latter has been the lowest reading since September 2015, when the PMI came in at 48.7 as well. The index reflects business conditions in the regions manufacturing sector and is interrelated with the Manufacturing Index, published by the Institute for Supply Management (ISM). A reading below the key level of 50.0 is indicative of pessimism (contraction in manufacturing activity). In case the PMI improved more than forecast, this would have a moderate bullish effect on the US dollar. The ISM-Chicago Inc. will release the official reading of this key barometer at 14:45 GMT.

Daily and Weekly Pivot Levels

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

Central Pivot Point – 1.3877
R1 – 1.3925
R2 – 1.3976
R3 – 1.4024

S1 – 1.3826
S2 – 1.3778
S3 – 1.3727

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

Central Pivot Point – 1.3870
R1 – 1.3948
R2 – 1.4073
R3 – 1.4151

S1 – 1.3745
S2 – 1.3667
S3 – 1.3542