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Forex Market: USD/CAD daily trading outlook

Yesterday’s trade saw USD/CAD within the range of 1.3043-1.3121. The pair closed at 1.3076, edging down 0.14% on a daily basis. It has been the 52nd drop in the past 107 trading days. The major pair has dipped 0.06% so far in June, following a 4.31% surge in the prior month. The latter has been the sharpest monthly gain since July 2015.

At 7:08 GMT today USD/CAD was inching up 0.01% on the day to trade at 1.3077. The pair touched a daily high at 1.3089 at 6:56 GMT, undershooting the daily R2 level, and a daily low at 1.3062 during the early phase of the Asian trading session.

Meanwhile, crude oil futures marked their 54th drop out of the past 118 trading days on June 1st. Oil for July delivery went down as low as $47.75 per barrel, or the lowest price level since May 24th, and closed at $48.90, shedding 0.41% from Tuesday’s close. As of 7:17 GMT today the commodity was edging up 0.29% to trade at $49.04, after going up as high as $49.06 per barrel earlier.

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


United States

Employment Change by ADP

Employers in the US non-farm private sector probably added 175 000 new jobs during May, according to the median estimate by experts, following 156 000 new positions added in March. The latter has been the lowest job growth since April 2013, when a revised down number of 131 000 jobs was reported.

Employment in the goods-producing sector dropped by 11 000, while employment in the services increased by 166 000. Manufacturing employment decreased by 13 000, while employment in construction grew by 14 000, in professional/business activities – by 27 000, in trade – by 25 000 and in financial activities – by 4 000.

The employment report by Automated Data Processing Inc. (ADP) is based on data that encompasses 400 000 – 500 000 companies employing over 24 million people, working in the 19 major sectors of the economy. The ADP employment change indicator is calculated in accordance with the same methodology, which the Bureau of Labor Statistics (BLS) uses. Published two days ahead of the governments employment statistics, this report is used by traders as a reliable predictor of the official non-farm payrolls data. Creation of jobs has a direct link to consumer spending, while the latter is a major driving force behind the US economic growth. In case new jobs growth outpaced expectations, this would have a moderate-to-strong bullish effect on the US dollar. The official figure is scheduled to be released at 12:15 GMT.

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 May 27th, probably rose to 270 000, according to market consensus, from 268 000 in the preceding week. The latter has been the lowest number of claims since the business week ended on April 28th, when an unrevised level of 257 000 was reported.

The 4-week moving average, an indicator lacking seasonal effects, was 278 500, marking an increase by 7 250 compared to the preceding weeks unrevised average.

The business week, which ended on May 20th has been the 64th consecutive week, when jobless claims stood below the 300 000 threshold, which suggested a healthy labor market. It has been the longest streak in 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 dropped to the seasonally adjusted 2 150 000 during the business week ended on May 20th, according to the median forecast by experts, from 2 163 000 in the preceding week. The latter represented an increase by 10 000 compared to the revised up number of claims reported in the week ended on May 6th. 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 12:35 GMT FOMC member, Jerome Powell, is expected to take a statement, followed by two other members of the Committee – the Fed President for New York, William Dudley, at 15:30 GMT and the Fed President for Dallas, Robert Kaplan, at 17:00 GMT. Their remarks will be closely watched for hints regarding the Feds future policy stance.


BoCs Poloz statement

At 14:45 GMT Bank of Canada Governor, Stephen Poloz, is expected to take a statement. Any remarks on policy or Canadas macroeconomic outlook would certainly boost CAD volatility.

Daily and Weekly Pivot Levels

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

R1 – 1.3083
R2 – 1.3090
R3 (range resistance) – 1.3097
R4 (range breakout) – 1.3119

S1 – 1.3069
S2 – 1.3062
S3 (range support) – 1.3055
S4 (range breakout) – 1.3033

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

Central Pivot Point – 1.3039
R1 – 1.3170
R2 – 1.3322
R3 – 1.3453

S1 – 1.2887
S2 – 1.2756
S3 – 1.2604

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