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Forex Market: USD/CAD daily trading outlook

Friday’s trade saw USD/CAD within the range of 1.2765-1.2990. The pair closed at 1.2773, edging down 0.36% on a daily basis. It has been the 36th drop in the past 75 trading days and also a second consecutive one. The daily low has been the lowest level since April 13th, when a low of 1.2744 was registered. USD/CAD has depreciated 2.01% so far during the current month, following two consecutive months of decline.

At 6:44 GMT today USD/CAD was edging down 0.16% on the day to trade at 1.2753. The pair touched a daily high at 1.2799 during the early phase of the Asian trading session, overshooting the daily R1 level, and a daily low at 1.2740 at 6:22 GMT.

The loonie was strongly supported, as crude oil futures recovered from earlier losses on Monday, breaking a three-day string of declines. April 18th marked the 45th gain in oil prices out of the past 86 trading days. Oil futures for June delivery went up as high as $41.63 per barrel on April 18th and closed at $41.47, advancing 2.85% from Fridays close. As of 6:57 GMT today the commodity was edging up 0.22% to trade at $41.56, after going up as high as $41.58 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

Housing Starts, Building Permits

The number of housing starts in the United States probably fell to 1.170 million units in March, according to market expectations, from the seasonally adjusted annual rate of 1.178 million during the prior month. The latter has been the highest number of starts since September 2015. In February starts of single-family houses increased at a monthly rate of 7.2% to 822 000, while starts of buildings with five units or more were 2.4% more to reach 341 000. In February, housing starts increased in the West (+26.1%), Midwest (+19.9%) and South (+7.1%). At the same time, starts were fewer in the Northeast (-51.3%).

Housing starts represent a gauge to measure residential units, on which construction has already begun every month. A start in construction is defined as the foundation laying of a building and it encompasses residential housing primarily.

The number of building permits in the country probably edged up to 1.200 million in March from an annual level of 1.167 million in February. Single-family authorizations rose at a monthly rate of 0.4% to reach 731 000 units in February, while permits of units in buildings with five units or more were reported to have slumped 9.1% to 401 000.

Building permits are permits, issued in order to allow excavation. An increase in the number of building permits and housing starts usually occurs a few months after mortgage rates in the country have been reduced. Authorizations are not required in all regions of the United States. Building permits, as an indicator, also provide clues in regard to demand in the US housing market. In case a higher-than-anticipated figure is reported, this would have a moderate bullish effect on the US dollar. The official housing data are due out at 12:30 GMT.

Canada

BoCs Poloz statement

At 15:00 GMT Bank of Canada Governor, Stephen Poloz, is expected to take a statement. His remarks may trigger a moderate-to-high volatility of the currency pairs containing the Canadian dollar.

Daily and Weekly Pivot Levels

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

R1 – 1.2794
R2 – 1.2814
R3 (range resistance) – 1.2835
R4 (range breakout) – 1.2897

S1 – 1.2752
S2 – 1.2732
S3 (range support) – 1.2711
S4 (range breakout) – 1.2649

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

Central Pivot Point – 1.2861
R1 – 1.2978
R2 – 1.3134
R3 – 1.3251

S1 – 1.2705
S2 – 1.2588
S3 – 1.2432

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