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Friday’s trade saw USD/CAD within the range of 1.4055-1.4180. The pair closed at 1.4170, rising 0.38% on a daily basis, while marking its fifth consecutive trading day of gains. The daily high has been the highest level since July 23rd 2003, when a high of 1.4196 was registered. In weekly terms, USD/CAD surged 2.32% last week, or the most since the week ended on December 13th, when it went up 2.95%. The pair has appreciated 2.01% so far during the current month, following two consecutive months of gains.

At 9:54 GMT today USD/CAD was losing 0.38% for the day to trade at 1.4120. The pair touched a daily low at 1.4115 at 9:48 GMT and a daily high at 1.4188 during the early hours of the Asian trading session. The daily high has been the new highest level since July 23rd 2003. The pair may receive support within the 1.4100-1.4115 area, then – at the hourly 100-period EMA (1.4078) and finally – in the area around the low from January 8th (1.4055). Resistance may be encountered in the area in proximity to the current daily high (1.4188).

On Monday USD/CAD trading may be influenced by the following macroeconomic reports as listed below.

Fundamentals

Canada

Housing Starts

The number of housing starts in Canada probably dropped to the seasonally adjusted annual level of 200 000 in December, according to market expectations, from 211 900 in November. If expectations were met, this would be the lowest number reported since October 2015, when a level of 198 100 was reached. Housing starts are considered as a key indicator, reflecting the strength of the nation’s housing sector. In case the number of housing starts increased more than expected, this would have a moderate bullish effect on the loonie. Canada’s Mortgage and Housing Corporation is to release the official data at 13:15 GMT.

BoC Business Outlook Survey

At 15:30 GMT Bank of Canada will release the results from its Business Outlook Survey. The latter represents a summary of interviews conducted by the bank’s regional offices with the senior management of about 100 business entities, selected in accordance with the composition of nation’s Gross Domestic Product. The major goal is to reflect the perspectives of these businesses on topics of key interest to the Bank of Canada, including demand and capacity pressures, as well as companies’ forward-looking views on economic activity. The survey encompasses opinions expressed by the respondents, which do not necessarily come in consonance with the Bank’s view or policy.

Correlation with other Majors

Taking into account the week ended on January 10th and the daily closing levels of the major currency pairs, we come to the following conclusions in regard to the strength of relationship:

GBP/USD to EUR/USD (0.7073, or strong)
GBP/USD to USD/CHF (-0.6558, or strong)
GBP/USD to GBP/USD (-0.9607, or very strong)
GBP/USD to USD/JPY (-0.9865, or very strong)
GBP/USD to NZD/USD (-0.9866, or very strong)
GBP/USD to AUD/USD (-0.9966, or very strong)

1. During the examined period USD/CAD moved almost equally in the opposite direction compared to GBP/USD, USD/JPY, NZD/USD and AUD/USD. The correlation between USD/CAD and AUD/USD was almost perfect.

2. USD/CAD moved strongly in one and the same direction with EUR/USD during the past week, while moving strongly in the opposite direction compared to USD/CHF.

Daily and Weekly Pivot Levels

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

R1 – 1.4181
R2 – 1.4193
R3 (range resistance) – 1.4204
R4 (range breakout) – 1.4239

S1 – 1.4159
S2 – 1.4147
S3 (range support) – 1.4136
S4 (range breakout) – 1.4101

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

Central Pivot Point – 1.4054
R1 – 1.4296
R2 – 1.4422
R3 – 1.4664

S1 – 1.3928
S2 – 1.3686
S3 – 1.3560

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