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Forex Market: USD/CAD daily trading outlook

Yesterday’s trade (in GMT terms) saw USD/CAD within the range of 1.3030-1.3139. The pair closed at 1.3121, gaining 0.59% compared to Fridays close. It has been the 158th gain in the past 291 trading days and also a second consecutive one. The daily high has been the highest level since June 2nd, when a high of 1.3145 was registered. The major pair has pared its advance to 1.00% so far during the current month, following a 1.29% slump in June.

At 7:48 GMT today USD/CAD was edging down 0.43% on the day to trade at 1.3065. The pair touched a daily high at 1.3133 during early European trade, overshooting the daily R1 level, and a daily low at 1.3045 during the early phase of the European trading session.

Meanwhile, crude oil futures marked their 79th drop out of the past 146 trading days on July 11th. Oil for August delivery went down as low as $44.43 per barrel, or its lowest level since May 11th, and closed at $44.76, losing 1.43% compared to Friday’s close. As of 8:00 GMT today the commodity was up 0.65% to trade at $45.05, after going up as high as $45.17 per barrel earlier.

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


United States

Fed speakers

Markets will be paying attention to the statements by several Fed officials. At 13:15 GMT Daniel Tarullo, is to speak, followed by the Fed President for St. Louis, James Bullard, at 13:35 GMT and the Fed President for Minneapolis, Neel Kashkari, at 21:30 GMT. Any hints regarding the Banks policy stance would heighten USD volatility.

Job Openings

The number of job openings in the United States probably decreased to 5.700 million in May from a month ago, according to the median forecast by experts. If so, this would be the lowest number of job openings since February, when a revised up 5.608 million positions were reported. In April a total of 5.788 million job openings were estimated, as the number of job openings waiting to be filled rose in wholesale trade (+65 000), transportation, warehousing, and utilities (+58 000), durable goods manufacturing (+46 000), real estate, rental and leasing (+41 000). At the same time, the number of openings decreased in professional and business services (-274 000).

This indicator refers to all job positions that are open, but not filled on the last business day of the month. Job openings are part of the Job Openings and Labor Turnover Survey (JOLTS), which gathers data from about 16 400 non-farm establishments including retailers and manufacturers, as well as federal, state, and local government entities in the 50 states and the District of Columbia. The survey assesses the unmet demand for labor in the labor market. A lower-than-projected level of job openings will usually have a limited bearish effect on the US Dollar. The Bureau of Labor Statistics is to release the official report at 14:00 GMT.

Bond Yield Spread

The yield on Canada’s 2-year government bonds went as high as 0.495% on July 11th, after which it closed at 0.473% to add 0.007 percentage point compared to July 8th.

Meanwhile, the yield on US 2-year government bonds climbed as high as 0.661% on July 11th, or the highest level since June 24th (0.755%), after which it fell to 0.657% at the close to add 4.4 basis points (0.044 percentage point) compared to July 8th.

The spread between 2-year US and 2-year Canadian bond yields, which reflects the flow of funds in a short term, widened to 0.184% on July 11th from 0.147% on July 8th. The July 11th yield spread has been the highest one since June 15th, when the difference was 0.192%.

Daily, Weekly and Monthly Pivot Levels

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

R1 – 1.3131
R2 – 1.3141
R3 (Range Resistance – Sell) – 1.3151
R4 (Long Breakout) – 1.3181
R5 (Breakout Target 1) – 1.3216
R6 (Breakout Target 2) – 1.3231

S1 – 1.3111
S2 – 1.3101
S3 (Range Support – Buy) – 1.3091
S4 (Short Breakout) – 1.3061
S5 (Breakout Target 1) – 1.3026
S6 (Breakout Target 2) – 1.3011

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

Central Pivot Point – 1.2987
R1 – 1.3147
R2 – 1.3250
R3 – 1.3410
R4 – 1.3570

S1 – 1.2884
S2 – 1.2724
S3 – 1.2621
S4 – 1.2518

In monthly terms, for USD/CAD we have the following pivots:

Central Pivot Point – 1.2907
R1 – 1.3163
R2 – 1.3401
R3 – 1.3657
R4 – 1.3913

S1 – 1.2669
S2 – 1.2413
S3 – 1.2175
S4 – 1.1937

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