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Forex Market: USD/CAD daily trading outlook

Yesterday’s trade saw USD/CAD within the range of 1.2594-1.2731. The pair closed at 1.2647, shedding 0.17% on a daily basis. It has been the 38th drop in the past 77 trading days and also a fourth consecutive one. The daily low has been the lowest level since July 6th 2015, when a low of 1.2560 was registered. USD/CAD has depreciated 2.87% so far during the current month, following a 3.94% slump in March.

At 7:03 GMT today USD/CAD was edging down 0.08% on the day to trade at 1.2637. The pair touched a daily high at 1.2662 during the early phase of the Asian trading session, overshooting the daily R1 level, and a daily low at 1.2628 at 6:19 GMT.

The loonie advanced to fresh 9.5-month highs, as crude oil futures tested highs unseen since early November 2015 on Wednesday. April 20th marked the 47th gain in oil prices out of the past 88 trading days. Oil futures for June delivery went up as high as $44.24 per barrel on April 20th, or the highest price level since November 10th 2015, and closed at $43.93, advancing 6.94% from Tuesdays close. As of 7:09 GMT today the commodity was gaining 0.61% to trade at $44.20, after going up as high as $44.48 per barrel earlier.

On Thursday USD/CAD trading may be influenced by the following macroeconomic reports as listed below.


United States

Initial, Continuing Jobless Claims

The number of people in the United States, who filed for unemployment assistance for the first time during the business week ended on April 15th, probably increased to 263 000, according to market expectations, from 253 000 in the preceding week. The latter has been the lowest number of claims since November 1973.

The 4-week moving average, an indicator lacking seasonal effects, was 265 000, marking a decrease by 1 500 compared to the preceding weeks revised down average.

The business week, which ended on April 8th has been the 58th consecutive week, when jobless claims stood below the 300 000 threshold, which suggested a healthy labor market.

Initial jobless claims number is a short-term indicator, reflecting lay-offs in the country. In case the number of claims met expectations or increased further, this would have a moderate bearish effect on the US dollar.

The number of continuing jobless claims probably remained steady at the seasonally adjusted 2 171 000 during the business week ended on April 8th, according to the median forecast by experts. The latter represented a decrease by 18 000 compared to the revised down number of claims reported in the week ended on March 25th. This indicator reflects the actual number of people unemployed and currently receiving unemployment benefits, who filed for unemployment assistance at least two weeks ago.

The Department of Labor is to release the weekly report at 12:30 GMT.

Philadelphia Fed Manufacturing Survey

The Philadelphia Fed Manufacturing Index probably slowed down to a reading of 8.9 in April, according to the median forecast by experts, from 12.4 in March. The latter has been the highest index level since June 2015, when the gauge was reported at 15.2. The index is based on a monthly business survey (the Business Outlook Survey), measuring manufacturing activity in the third district of the Federal Reserve, Philadelphia. Participants give their opinion about the direction of business changes in overall economy and different indicators of activity in their companies, such as employment, working hours, new and existing orders, deliveries, inventories, delivery time, price etc. The survey is conducted every month since May 1968. The results are presented as the difference between the percentages of positive and negative projections. A level above zero is indicative of improving conditions, while a level below zero is indicative of worsening conditions. In case the index slowed down more than projected, this would have a moderate bearish effect on the US dollar. The Federal Reserve Bank of Philadelphia is expected to release the official results from the survey at 12:30 GMT.

CB Leading Economic Index

The Conference Board Leading Economic Index for the United States probably continued to increase in March, going up at a monthly rate of 0.4%, according to the median estimate by experts. In February the index ticked up 0.1%, following two straight months of decline.

It encompasses a variety of economic indicators, which signify possible changes in overall economic activity. The index is comprised by the following components: average weekly hours in manufacturing, average weekly initial claims for unemployment insurance, manufacturers’ new orders, consumer goods and materials, ISM Index of New Orders, manufacturers new orders, non-defense capital goods excluding aircraft orders, building permits, new private housing units, Stock prices, 500 common stocks, Leading Credit Index, interest rate spread, 10-year Treasury bonds less federal funds, average consumer expectations for business conditions. A better-than-expected performance of the index would have a moderate bullish effect on the US dollar. The Conference Board research group will release the official report 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 – 1.2660
R2 – 1.2672
R3 (range resistance) – 1.2685
R4 (range breakout) – 1.2722

S1 – 1.2634
S2 – 1.2622
S3 (range support) – 1.2609
S4 (range breakout) – 1.2572

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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