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Forex Market: USD/CAD daily trading outlook

Yesterday’s trade saw USD/CAD within the range of 1.3167-1.3285. The pair closed at 1.3176, falling 0.75% on a daily basis. It has been the 28th drop in the past 60 trading days and also the steepest one since March 17th, when the cross went down 0.95%. The daily low has been the lowest level since March 23rd, when a low of 1.3034 was registered. USD/CAD has depreciated 2.49% so far during the current month, following a 3.10% drop in February.

At 6:38 GMT today USD/CAD was edging up 0.21% on the day to trade at 1.3204. The pair touched a daily high at 1.3209 at 6:25 GMT, overshooting the range resistance level (R3), and a daily low at 1.3175 during early Asian trade.

Canada’s dollar gained ground against its US counterpart on Monday, as crude oil futures surged to a two-day high, but erased gains later in the day. March 28th marked the 35th drop in oil prices out of the past 71 trading days and also a third consecutive one. Oil futures for May delivery went down as low as $38.87 per barrel on March 28th and closed at $39.34, shedding 0.29% on the day. As of 6:46 GMT today the commodity was losing 0.76% to trade at $39.04, after going down as low as $39.02 per barrel earlier.

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

Fundamentals

United States

S&P/Case-Shiller Home Price Index

At 13:00 GMT Standard & Poors will report on the performance of its House Price Index, which measures the change in prices of single-family homes in 20 metropolitan areas across the US. The report serves as a gauge of the US housing markets health. According to the median estimate by experts, home prices in the 20 areas probably rose 5.9% in January compared to January 2015, following a 5.7% surge in December. If expectations were met, Januarys rate of increase would be the sharpest one since July 2014, when home prices climbed 6.7% year-on-year. Within a recovering economy, a sharper-than-projected gain in prices will usually have a moderate bullish effect on the local currency.

Consumer Confidence Index by the CB

Confidence among consumers in the United States probably rebounded in March, with the corresponding index coming in at a reading of 94.0, according to market expectations. In February the gauge was reported at 92.2, or the lowest since July 2015.

This indicator measures the level of individuals confidence in the US economic development. It is considered as a leading indicator, as it gives an early insight into consumer spending, which accounts for a major part of the nations GDP.

In case the index came above expectations, this would have a strong bullish effect on the US dollar, as higher confidence suggests a greater willingness to spend and, respectively, an accelerated economic growth. The Conference Board research group is to publish the official index reading at 14:00 GMT.

Fed Yellens statement

At 16:30 GMT Federal Reserve Chair Janet Yellen is expected to take a statement. A moderate-to-high volatility of the currency pairs containing the US Dollar is usually expected during such events.

Canada

Producer Prices

Prices of industrial products in Canada probably dropped at a monthly rate of 0.2% in February, according to market expectations. In January prices were up 0.5%, which has been the first gain in six months. This index measures the change in prices of industrial goods, sold by manufacturers in the country. It is also used as an indicator of commodity inflation. In case a larger-than-anticipated decrease in prices is reported, this would have a limited bearish effect on the local dollar, as the latter tends to be sensitive to changes in commodity prices. Statistics Canada is to release the official data at 12:30 GMT.

Daily and Weekly Pivot Levels

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

R1 – 1.3187
R2 – 1.3198
R3 (range resistance) – 1.3208
R4 (range breakout) – 1.3241

S1 – 1.3165
S2 – 1.3154
S3 (range support) – 1.3144
S4 (range breakout) – 1.3111

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

Central Pivot Point – 1.3188
R1 – 1.3385
R2 – 1.3494
R3 – 1.3691

S1 – 1.3079
S2 – 1.2882
S3 – 1.2773

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