Yesterday’s trade saw USD/CAD within the range of 1.3209-1.3309. The pair closed at 1.3276, rising 0.50% on a daily basis. It has been the 26th gain in the past 50 trading days. USD/CAD has lost 1.59% of its value so far during the current month.
At 7:35 GMT today USD/CAD was gaining 0.41% on the day to trade at 1.3331. The pair touched a daily high at 1.3333 at 7:34 GMT, overshooting the upper range breakout level (R4), and a daily low at 1.3264 during early Asian trade.
Canada’s dollar came off recent 4-month highs against its US counterpart on Monday, as crude oil futures distanced from 3-month highs. March 14th marked the 30th drop in oil prices out of the past 62 trading days. Oil futures for April delivery went down as low as $36.68 per barrel on March 14th, or the lowest price level since March 9th, and closed at $37.30, falling 2.81% on the day. As of 7:44 GMT today the commodity was losing 2.47% on a daily basis to trade at $36.38 per barrel, after going down as low as $36.36 earlier. Oil has reduced gains to 7.76% so far during the current month.
On Tuesday USD/CAD trading may be influenced by the following macroeconomic reports as listed below.
Fundamentals
United States
New York Empire State Manufacturing Index
The New York Empire State Manufacturing Index probably improved to a value of -10.00 in March, according to the median forecast by experts, from -16.64 in February. If market expectations were met, March would be the 8th straight month, when the gauge inhabited negative territory.
The sub-indexes of new orders and shipments marked an improvement in February, but still remained in the area of contraction. The gauge for prices paid eased to 2.97 last month from 16 in January, while the gauge for prices received plunged to a reading of -4.95 in February from 4 in January. The number of employees index was registered at -0.99 in February, up from -13 in January, while the average workweek index suggested fewer hours worked.
Higher-than-anticipated index values will usually have a moderate bullish effect on the US dollar. The Federal Reserve Bank of New York is expected to release the official reading at 12:30 GMT.
Retail Sales
Retail sales in the United States probably decreased 0.2% in February on a monthly basis, according to the median forecast by experts, following a 0.2% surge in January. The latter has been the 3rd consecutive month of sales growth.
Among the 13 major categories, 8 registered growth, 4 showed declines and 1 showed no change. In January, an increase in sales was reported at non-store retailers (up 1.6%), miscellaneous store retailers (up 1.2%), general merchandise stores (up 0.8%), motor vehicle and parts dealers (up 0.6%), building material, garden equipment and supplies dealers (up 0.6%), food and beverages (up 0.5%), clothing and clothing accessories stores (up 0.2%) and at electronics and appliance stores (up 0.1%).
On the other hand, in January, retail sales dropped at gasoline stations (down 3.1% month-over-month), at sporting goods, hobby, book and music stores supplies dealers (down 2.1%), furniture and home furniture stores (down 0.5%) and at food services and drinking places (down 0.5% from a month ago).
Sales at health and personal care stores remained unchanged during the same month, according to the report by the US Census Bureau.
Annualized retail sales surged 3.4% in January, or the most in at least a year, following a 2.2% climb in December.
US core retail sales, or retail sales ex autos, probably increased 0.1% in February compared to a month ago, following 0.1% growth rates in December and January. This indicator removes large ticket prices and historical seasonality of automobile sales.
Since retail sales provide key information regarding consumer spending trends, while consumer expenditures, on the other hand, account for almost two-thirds of the US Gross Domestic Product, a larger-than-expected rate of decrease in sales would have a strong bearish effect on the US dollar. The official report is due out at 12:30 GMT.
Producer Prices
Annual producer prices in the United States probably rose for the first time in the past 13 months in February, by 0.1%, according to the median estimate by experts. In January producer prices were 0.2% lower, or the smallest annual drop since February 2015, when prices fell 0.6%. The Producer Price Index reflects the change in prices of over 8 000 products, sold by manufacturers during the respective period. The PPI differs from the Consumer Price Index (CPI), which measures the change in prices from consumer’s perspective, due to subsidies, taxes and distribution costs of different types of manufacturers in the country. In case producers are forced to pay more for goods and services, they are more likely to pass these higher costs to the end consumer. Therefore, the PPI is considered as a leading indicator of consumer inflation. In case annual producer prices rose at a faster rate than anticipated, this would have a moderate bullish effect on the US dollar.
The nation’s annualized core producer price inflation, which excludes prices of volatile categories such as food and energy, probably accelerated to 1.1% in February from 0.6% in January. If so, it would be the fastest annual surge in the core PPI since January 2015. The Bureau of Labor Statistics is expected to report on the official PPI performance at 12:30 GMT.
NAHB Housing Market Index
The National Association of Home Builders (NAHB) Housing Market Index rose to 59.0 in March, according to market expectations, from 58.0 in February. If so, this would be the 21st consecutive month, when the gauge stood in the area above 50.0. 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 14:00 GMT.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for USD/CAD are presented as follows:
R1 – 1.3285
R2 – 1.3295
R3 (range resistance) – 1.3304
R4 (range breakout) – 1.3331
S1 – 1.3267
S2 – 1.3258
S3 (range support) – 1.3249
S4 (range breakout) – 1.3221
By using the traditional method of calculation, the weekly pivot levels for USD/CAD are presented as follows:
Central Pivot Point – 1.3274
R1 – 1.3383
R2 – 1.3557
R3 – 1.3666
S1 – 1.3100
S2 – 1.2991
S3 – 1.2817
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