Yesterday’s trade saw USD/CAD within the range of 1.3228-1.3399. The pair closed at 1.3338, appreciating 0.66% on a daily basis. It has been the 25th gain in the past 48 trading days. The daily low was a higher-low test of the low from March 9th, while the latter has been the lowest level since November 12th 2015. USD/CAD has tumbled 2.01% so far during the current month, following a 3.10% slump in February.
At 7:54 GMT today USD/CAD was losing 0.60% on the day to trade at 1.3258. The pair touched a daily low at 1.3255 at 6:42 GMT, undershooting the lower range breakout level (S4), and a daily high at 1.3358 during the early phase of the Asian trading session.
Canada’s dollar continued trading close to 4-month highs against its US counterpart on Thursday, as crude oil futures remained in proximity to highs unseen since December 9th 2015. March 10th marked the 29th drop in oil prices out of the past 60 trading days. Oil futures for April delivery went up as high as $38.48 per barrel on March 10th and closed at $38.03, shedding 0.68% on the day. As of 7:52 GMT today the commodity was gaining 1.60% on a daily basis to trade at $38.64 per barrel, after going up as high as $38.83 earlier. The latter has been a fresh 3-month high. Oil has extended gains to 14.55% so far during the current month.
On Friday USD/CAD trading may be influenced by the following events and macroeconomic reports as listed below.
Fundamentals
United States
Export and Import prices
Prices of imported goods in the United States probably fell for a 9th consecutive month in February, going down at a monthly rate of 0.7%, according to market expectations. In January import prices were 1.1% lower from a month ago, driven by a 12.4% slump in fuel prices. Non-fuel prices were down 0.2% during the same month. In annual terms, prices were 6.2% lower in January, which has been the 18th consecutive month of decline, but also the smallest one since December 2014. Generally, lower import prices of goods suggest lower rates of consumer inflation.
Prices of exported goods from the United States probably decreased for a 9th consecutive month in February, falling at a monthly rate of 0.4%. In January export prices were 0.8% lower from a month ago, as agricultural export prices fell 1.1%, while prices of non-agricultural goods dropped 0.8%. In annual terms, export prices slumped 5.7% in January, or for a 17th month in a row. Lower prices of exported goods generally bolster demand abroad, and as US trade accounts for 20% of international trade relations, this also tends to be dollar positive.
The Department of Labor is expected to release the official numbers at 13:30 GMT.
Canada
Change in employment, Unemployment Rate
The number of the employed people in Canada probably increased by 5 500 in February, according to market expectations. In January the number of the employed fell by 5 700 to 18 005 200.
In January, the number of part-time employed dropped by 11 300, while the number of persons in full-time employment went up by 5 600. During the month employment was lower sectors such as agriculture (-14 000), manufacturing (-11 000), transportation and warehousing (-10 000) and public administration (-7 200). At the same time, more people were employed in information culture and recreation (+16 000) and in the “other services” segment (+9 600).
In January employment decreased among persons aged 55 and older, while the number of employed women aged 25 to 54 rose, according to the report by the Statistics Canada.
Meanwhile, the rate of unemployment in the country probably remained at 7.2% for a second straight month in February, according to the median forecast by analysts. It has been the highest rate since December 2013. In November and December 2015 Canadian unemployment rate was reported at 7.1%.
A lower-than-expected rate of increase in employment and a surge in unemployment rate would have a strong bearish effect on the local currency. Statistics Canada is expected to release the official employment report 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 – 1.3354
R2 – 1.3369
R3 (range resistance) – 1.3385
R4 (range breakout) – 1.3432
S1 – 1.3322
S2 – 1.3307
S3 (range support) – 1.3290
S4 (range breakout) – 1.3244
By using the traditional method of calculation, the weekly pivot levels for USD/CAD are presented as follows:
Central Pivot Point – 1.3404
R1 – 1.3500
R2 – 1.3684
R3 – 1.3780
S1 – 1.3220
S2 – 1.3124
S3 – 1.2940
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