Yesterday’s trade saw USD/CAD within the range of 1.2763-1.2826. The pair closed at 1.2805, inching down 0.01% compared to Mondays close. It has been the 127th drop in the past 277 trading days and also a third consecutive one. The daily low has been the lowest level since June 13th, when a low of 1.2747 was registered. USD/CAD has gone down 2.43% so far in June, following a 4.31% surge in the prior month.
At 7:26 GMT today USD/CAD was edging down 0.23% on the day to trade at 1.2775. The pair touched a daily high at 1.2818 during the early phase of the Asian trading session, overshooting the daily R2 level, and a daily low at 1.2771 at 7:05 GMT.
Canadas dollar advanced a third straight day against its US counterpart on Tuesday, as crude oil futures tested highs unseen since June 10th. Crude oil marked its 71st gain out of the past 132 trading days on June 21st. Oil for August delivery went up as high as $50.45 per barrel and closed at $50.36, rising 2.01% compared to Monday’s close. As of 7:34 GMT today the commodity was edging down 0.12% to trade at $50.30, after going down as low as $49.87 per barrel earlier.
On Wednesday USD/CAD trading may be influenced by the following macroeconomic reports and other events as listed below.
Fundamentals
United States
Yellen testifies
At 14:00 GMT the Fed Chair, Janet Yellen is expected to speak in front of the House Financial Services Committee.
Existing Home Sales
The index of existing home sales in the United States probably rose 1.1% to a level of 5.54 million in May compared to April, according to the median estimate by experts. If expectations were met, Mays level of sales would be the highest since September 2015, when the unrevised 5.55 million homes were sold. In April sales were 1.7% higher from a month ago to reach 5.45 million. Sales of new single-family houses rose at a monthly rate of 0.6% in April, while sales of condos surged 10.3%. At the same time, the average sales price was 4% higher from a month ago.
In case the index increased at a steeper monthly rate than anticipated, this would have a limited-to-moderate bullish effect on the US dollar. The National Association of Realtors (NAR) is to release the official figure at 14:00 GMT.
Canada
Retail Sales
Retail sales in Canada probably rose 0.9% in April on a monthly basis, according to the median forecast by experts, following a 1.0% drop in the prior month. The latter has been the sharpest monthly decrease since December, when sales dropped at a revised up rate of 2.1%. In March, sales were lower at motor vehicle and parts dealers (down 2.9% month-over-month), furniture and home furnishings stores (down 3.7%), gasoline stations (down 1.1%), food and beverage stores (down 0.4%) and building material and garden equipment and supplies dealers (down 0.7%).
Retail sales, excluding sales of automobiles, probably rose 0.6% in April compared to March, following a 0.3% drop in the prior month. Large-ticket purchases are excluded due to their high volatility, which could influence the general trend. In case general retail sales increased at a faster rate than anticipated in April, this would have a moderate bullish effect on the Canadian dollar. Statistics Canada is to release the official report at 12:30 GMT.
Bond Yield Spread
The yield on Canada’s 2-year government bonds went as high as 0.608% on June 21st, or the highest level since June 1st (0.619%), after which it closed at 0.607% to add 2.4 basis points (0.024 percentage point) compared to June 20th.
Meanwhile, the yield on US 2-year government bonds climbed as high as 0.771% on June 21st, or the highest level since June 10th (0.771%), after which it fell to 0.767% at the close to gain 2.6 basis points (0.026 percentage point) compared to June 20th.
The spread between 2-year US and 2-year Canadian bond yields, which reflects the flow of funds in a short term, rose to 0.159% on June 21st from 0.158% on June 20th. The June 21st yield spread has been the highest one since June 17th, when the difference was 0.177%.
Daily, Weekly and Monthly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for USD/CAD are presented as follows:
R1 – 1.2811
R2 – 1.2817
R3 (range resistance) – 1.2822
R4 (range breakout) – 1.2840
S1 – 1.2799
S2 – 1.2793
S3 (range support) – 1.2788
S4 (range breakout) – 1.2770
By using the traditional method of calculation, the weekly pivot levels for USD/CAD are presented as follows:
Central Pivot Point – 1.2910
R1 – 1.3073
R2 – 1.3251
R3 – 1.3414
S1 – 1.2732
S2 – 1.2569
S3 – 1.2391
In monthly terms, for USD/CAD we have the following pivots:
Central Pivot Point – 1.2914
R1 – 1.3317
R2 – 1.3646
R3 – 1.4102
S1 – 1.2638
S2 – 1.2182
S3 – 1.1906
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