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Forex Market: USD/CAD daily trading outlook

Yesterday’s trade saw USD/CAD within the range of 1.3795-1.3863. The pair closed at 1.3823, shedding 0.11% on a daily basis. It has been the 13th drop in the past 30 trading days and also a second consecutive one. In addition, the daily low has been the lowest level since February 9th, when a low of 1.3783 was registered.

At 9:02 GMT today USD/CAD was losing 0.47% for the day to trade at 1.3758. The pair touched a daily low at 1.3707 at 8:59 GMT and a daily high at 1.3842 during the early phase of the Asian trading session.

Canada’s dollar seemed to have halted its recent decline against its US counterpart, as crude oil continued to distance from multi-year lows on Monday. February 15th marked the 19th gain in oil prices out of the past 42 trading days. Oil futures for March delivery went up as high as $30.69 per barrel on February 15th, or the highest price level since February 8th, and closed at a level of $30.60. As of 9:13 GMT today the commodity was losing 2.30% on a daily basis to trade at $29.90 per barrel, after going up as high as $31.44 earlier. Oil has eased its slump to 10.43% so far during the current month.

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


United States

New York Empire State Manufacturing Index

The New York Empire State Manufacturing Index probably improved to a value of -10.00 in February, according to the median forecast by experts, from -19.37 in January. The latter has been the lowest level since March 2009, as the sub-indexes of new orders and shipments went down sharply, while labor market conditions in the sector continued to worsen. If market expectations were met, February would be the seventh straight month, when the gauge inhabited negative territory.

The index is based on the monthly Empire State Manufacturing Survey, which is conducted by the Federal Reserve Bank of New York. About 200 top manufacturing executives respond to a questionnaire, sent out during the first day of the month. They provide their estimates in regard to the performance of several business indicators from the prior month, while also forecasting performance during the upcoming six months.

Readings below 0.00 are indicative of worsening business conditions in the region. Lower-than-anticipated index values will usually have a moderate bearish effect on the US dollar. The Federal Reserve Bank of New York is expected to release the official reading at 13:30 GMT.

NAHB Housing Market Index

The National Association of Home Builders (NAHB) Housing Market Index probably remained at 60.0 for the second consecutive month in February, according to market expectations. If so, this would be the 20th consecutive month, when the gauge stood in the area above 50.0. In December the index was reported at 61.0. The indicator is based on a monthly survey in regard to current home sales and expected sales in the coming six months. Values above the key level of 50.0 indicate that housing market conditions are good. Therefore, higher-than-projected readings would provide a moderate support to the US dollar. The official report is scheduled for release at 15:00 GMT.


Manufacturing Shipments

Manufacturing sales in Canada probably increased for a second month in a row in December, going up at a monthly rate of 0.8%, according to market expectations. In November compared to October shipments were 1.0% higher, which has been the steepest monthly increase since July 2015. The Monthly Survey of Manufacturing features statistical data regarding sales of finished goods, inventories, unfilled orders and new orders in Canadas sector of manufacturing. About 10 500 items and 27 000 companies are encompassed.

Manufacturing sales are considered as an indicator of demand in the future. An increase in the number of goods and unsold inventories suggests, that demand is insufficient and vice versa. At the same time, a surge in sales (shipments) suggests a stronger demand. Therefore, in case shipments rose at a faster pace than anticipated, this might have a limited bullish impact on the Canadian dollar. Statistics Canada will release the official data at 13:30 GMT.

Daily and Weekly Pivot Levels

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

R1 – 1.3829
R2 – 1.3835
R3 (range resistance) – 1.3842
R4 (range breakout) – 1.3860

S1 – 1.3817
S2 – 1.3810
S3 (range support) – 1.3804
S4 (range breakout) – 1.3786

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

Central Pivot Point – 1.3882
R1 – 1.3982
R2 – 1.4116
R3 – 1.4216

S1 – 1.3748
S2 – 1.3648
S3 – 1.3514

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