Yesterday’s trade saw USD/CAD within the range of 1.2697-1.2886. The pair closed at 1.2864, surging 1.12% on a daily basis. It has been the 44th gain in the past 87 trading days and also a second consecutive one. The daily high has been the highest level since April 18th, when a high of 1.2992 was registered. The major pair has appreciated 2.26% so far during the current month, following three consecutive months of decline.
At 7:17 GMT today USD/CAD was edging down 0.23% on the day to trade at 1.2835. The pair touched a daily high at 1.2873 during the early phase of the Asian trading session, undershooting the daily R1 level, and a daily low at 1.2814 at 6:57 GMT.
The loonie further distanced from recent 10-month highs, as crude oil futures retreated further from 6-month highs on Wednesday. May 4th marked the 53rd gain in oil prices out of the past 98 trading days. Oil futures for June delivery went down as low as $43.22 per barrel on May 4th, or the lowest price level since April 26th, and closed at $44.41, gaining 1.74% compared to Tuesday’s close. As of 7:29 GMT today the commodity was up 1.44% to trade at $45.05, after going up as high as $45.16 per barrel earlier.
On Thursday USD/CAD trading may be influenced by the following macroeconomic reports and other events as listed below.
Fundamentals
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 29th, probably increased to 260 000, according to market consensus, from 257 000 in the preceding week. If expectations were met, this would be the highest number of claims since the business week ended on April 1st, when a revised down 266 000 claims were reported.
The 4-week moving average, an indicator lacking seasonal effects, was 256 000, marking a decrease by 4 750 compared to the preceding weeks revised up average. It has been the lowest level since December 8th 1973, when the average was reported at 252 250.
The business week, which ended on April 22nd has been the 60th consecutive week, when jobless claims stood below the 300 000 threshold, which suggested a healthy labor market. It has been the longest streak in almost 43 years.
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 rose to the seasonally adjusted 2 133 000 during the business week ended on April 22nd, according to the median forecast by experts, from 2 130 000 in the preceding week. The latter has been the lowest level since November 4th 2000, when 2 110 000 claims were reported. The figure also represented a decrease by 5 000 compared to the revised down number of claims reported in the week ended on April 8th. 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 US Department of Labor is to release the weekly report at 12:30 GMT.
Fed Speakers
At 15:30 GMT the Federal Reserve President for St. Louis, James Bullard, is expected to take a statement, followed by the Fed President for Atlanta, Dennis Lockhart, and the Fed President for San Francisco and also a FOMC member, John Williams, both scheduled to speak at 23:15 GMT. Market players will be paying a close attention to their remarks in search of hints regarding the Feds policy tightening cycle.
Canada
Building Permits
The overall value of building permits in Canada, issued by municipalities, probably dropped 5.0% in March, according to expectations. The total value of building permits in the country went up 15.5% to reach CAD 7.4 billion in February compared to a month ago, due to higher construction intentions for commercial buildings in Alberta, single-family housing in Ontario and institutional structures in Quebec. The value of non-residential building permits went up 33.1% to reach CAD 3.2 billion in February, supported by higher construction intentions for commercial (up 56.6%) and institutional (up 18.7%) buildings. At the same time, the value of residential building permits rose 5.0% to CAD 4.2 billion during the same period.
Building permits, as an indicator, provide information regarding demand in Canada’s housing sector. In case the total value of permits declined more than expected in March from a month earlier, this would have a limited bearish effect on the Canadian dollar. Statistics Canada is expected to release the official numbers 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 – 1.2881
R2 – 1.2900
R3 (range resistance) – 1.2916
R4 (range breakout) – 1.2968
S1 – 1.2847
S2 – 1.2829
S3 (range support) – 1.2812
S4 (range breakout) – 1.2760
By using the traditional method of calculation, the weekly pivot levels for USD/CAD are presented as follows:
Central Pivot Point – 1.2589
R1 – 1.2682
R2 – 1.2812
R3 – 1.2905
S1 – 1.2459
S2 – 1.2366
S3 – 1.2236
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