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Forex Market: USD/CAD daily trading outlook

Yesterday’s trade saw USD/CAD within the range of 1.2655-1.2760. The pair closed at 1.2687, retreating 0.38% on a daily basis. It has been the 56th drop in the past 112 trading days and also a fourth consecutive one. The daily low has been the lowest level since May 3rd, when a low of 1.2458 was registered. The major pair has gone down 3.18% so far in June, following a 4.31% surge in the prior month.

At 7:03 GMT today USD/CAD was inching down 0.08% on the day to trade at 1.2677. The pair touched a daily high at 1.2696 during the early phase of the Asian trading session, undershooting the daily R1 level, and a daily low at 1.2671 at 6:50 GMT.

Canadas dollar registered fresh 1-month highs against its US counterpart, as crude oil futures tested highs unseen since July 16th 2015 on Wednesday. Crude oil marked its 68th gain out of the past 123 trading days on June 8th. Oil for July delivery went up as high as $51.67 per barrel and closed at $51.60, surging 2.45% compared to Tuesday’s close. As of 7:10 GMT today the commodity was edging down 0.10% to trade at $51.55, after going down as low as $51.48 per barrel earlier.

On Thursday USD/CAD trading may be influenced by the following macroeconomic reports and other events 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 June 3rd, probably rose to 270 000, according to market consensus, from 267 000 in the preceding week. The latter has been the lowest number of claims since the business week ended on April 29th, when an unrevised level of 257 000 was reported.

The 4-week moving average, an indicator lacking seasonal effects, was 276 750, marking a decrease by 1 750 compared to the preceding weeks unrevised average.

The business week, which ended on May 27th has been the 65th 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 2 171 000 during the business week ended on May 27th, according to the median forecast by experts, from 2 172 000 in the preceding week. The latter represented an increase by 12 000 compared to the revised down number of claims reported in the week ended on May 13th. 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.


New Housing Price Index

Selling prices of new homes in Canada probably rose for a 13th straight month in April, up 0.2% from a month ago, according to market expectations. In March compared to February prices went up by another 0.2%. Home values climbed at a rate of 2.0% in March compared to the same month a year ago, following a 1.8% surge during the prior period. The combined region of Toronto and Oshawa, and Vancouver were the top contributors to the overall price increase in March, with home values rising 0.4% month-over-month in both areas. In March, the largest monthly price surge was observed in London (up 0.8%), as home builders cited higher material and labor costs as main supporting factors. It has been the steepest monthly increase since March 2010. During the same period, home values went up in Windsor (up 0.3% month-over-month) and Winnipeg (up 0.3%) as well, while falling in Saskatoon (down 0.4% month-over-month) and St. Johns (down 0.1%).

The New Housing Price Index is a key indicator, reflecting the health of the Canadian housing market. Given the current state of the economy, in case prices surged more than anticipated, this would be an indication of a stronger consumer confidence and would, therefore, have a limited bullish effect on the loonie. Statistics Canada will release the official report at 12:30 GMT.

BoCs Poloz statement

At 15:15 GMT Bank of Canadas Governor, Stephen Poloz, is expected to take a statement. Any remarks made in regard to the nations macroeconomic outlook, or the Banks future monetary policy stance would certainly heighten 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 – 1.2697
R2 – 1.2706
R3 (range resistance) – 1.2716
R4 (range breakout) – 1.2745

S1 – 1.2677
S2 – 1.2668
S3 (range support) – 1.2658
S4 (range breakout) – 1.2629

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

Central Pivot Point – 1.2997
R1 – 1.3082
R2 – 1.3231
R3 – 1.3316

S1 – 1.2848
S2 – 1.2763
S3 – 1.2614

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