Yesterday’s trade saw USD/CAD within the range of 1.2885-1.3016. The pair closed at 1.2910, going down 0.60% on a daily basis. It has been the 33rd drop in the past 70 trading days and also a second consecutive one. The daily low has been the lowest level since March 31st, when a low of 1.2853 was registered. USD/CAD has increased its slump to 0.88% so far during the current month, following two straight months of decline.
At 7:46 GMT today USD/CAD was edging down 0.15% on the day to trade at 1.2891. The pair touched a daily low at 1.2875 at 7:17 GMT, undershooting the range support level (S3), and a daily high at 1.2920 during the late phase of the Asian trading session.
Canadas dollar advanced to fresh one-week highs against its US counterpart, as crude oil futures tested highs unseen in almost two weeks on April 11th. Monday marked the 42nd gain in oil prices out of the past 81 trading days and also a second consecutive one. Oil futures for May delivery went up as high as $40.75 per barrel on April 11th, or the highest price level since March 23rd, and closed at $40.21, soaring 1.23% on the day. As of 7:53 GMT today the commodity was gaining 0.65% to trade at $40.47, after going up as high as $40.58 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
Export and Import prices
Prices of imported goods in the United States probably rose for the first time in 9 months in March, going up at a monthly rate of 1.0%, according to market expectations. In February import prices were 0.3% lower from a month ago, as import fuel prices fell at a slower 3.9% rate, following a 13.3% drop in January. Non-fuel prices edged down 0.1% during the same month. In annual terms, prices were 6.1% lower in February, which has been the 19th 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 10th consecutive month in March, falling at a monthly rate of 0.2%. In February export prices were 0.4% lower from a month ago, as agricultural export prices rose 0.6%, while prices of non-agricultural goods dropped 0.4%. In annual terms, export prices slumped 6.0% in February, or for an 18th 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 12:30 GMT.
Fed speakers
Several Federal Open Market Committee representatives are expected to take a statement today. At 13:00 GMT the Fed President for Philadelphia, Patrick Harker, is to speak, followed by the Fed President for San Francisco, John Williams at 19:00 GMT and the Fed President for Richmond, Jeffrey Lacker at 20:00 GMT. Limited-to-moderate volatility of the currency pairs, containing the US Dollar, is expected during these events.
Monthly Budget Statement
The United States probably recorded a government budget deficit of USD 104 billion in March, according to market expectations, after a budget gap of USD 193 billion during the previous month. In February 2015 a deficit figure of USD 192 billion was reported.
In February total receipts were at USD 169 billion. Social security and other payroll taxes contributed to USD 85 billion, individual income taxes – USD 65 billion, while other taxes and duties accounted for USD 22 billion.
Total outlays amounted to USD 362 billion during February. Social security contributed to USD 76 billion, Medicare – USD 45 billion, defense – USD 44 billion, while interest on debt – USD 19 billion, according to the report by the US Treasury.
The current fiscal year-to-date budget gap amounted to USD 353 billion, or a 9% decrease compared to the same period a year earlier.
A larger-than-projected budget deficit in March would have a moderate bearish effect on the greenback. The Financial Management Service is to publish the official figure at 18:00 GMT.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for USD/CAD are presented as follows:
R1 – 1.2922
R2 – 1.2934
R3 (range resistance) – 1.2946
R4 (range breakout) – 1.2982
S1 – 1.2898
S2 – 1.2886
S3 (range support) – 1.2874
S4 (range breakout) – 1.2838
By using the traditional method of calculation, the weekly pivot levels for USD/CAD are presented as follows:
Central Pivot Point – 1.3050
R1 – 1.3148
R2 – 1.3316
R3 – 1.3414
S1 – 1.2882
S2 – 1.2784
S3 – 1.2616
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