fbpx

Join our community of traders FOR FREE!

  • Learn
  • Improve yourself
  • Get Rewards
Learn More

Forex Market: USD/CAD trading outlook for October 10th 2016

canada-dollar-loonie

Friday’s trade (in GMT terms) saw USD/CAD within the range of 1.3186-1.3314. The pair closed at 1.3298, edging up 0.60% compared to Thursdays close. It has been the 185th gain in the past 355 trading days, a second consecutive one and also the steepest one since September 23rd. The daily high has been a level unseen since March 16th, when a high of 1.3406 was registered. In weekly terms, USD/CAD added 1.29% to its value during the past week. It has been the 15th gain in the past 40 weeks and also the sharpest one since the week ended on May 22nd. The major pair has increased its advance to 1.29% so far during the current month, following a 0.18% gain in September.

At 8:43 GMT today USD/CAD was edging down 0.26% on the day to trade at 1.3264. The pair touched a daily high at 1.3280 during early European trade and a daily low at 1.3226 during the early phase of the Asian trading session.

No relevant macroeconomic reports and other events, which may influence USD/CAD trading, are scheduled on Monday.

Correlation with other Majors

Taking into account the business week ended on October 7th and the daily closing levels of the major currency pairs, we come to the following conclusions in regard to the strength of relationship:

USD/CAD to USD/CHF (0.5365, or strong)
USD/CAD to USD/JPY (0.4750, or moderate)
USD/CAD to EUR/USD (-0.2931, or weak)
USD/CAD to NZD/USD (-0.7636, or strong)
USD/CAD to AUD/USD (-0.8717, or very strong)
USD/CAD to GBP/USD (-0.9884, or very strong)

1. During the examined period USD/CAD moved strongly in one and the same direction with USD/CHF, while moving strongly in the opposite direction compared to NZD/USD.

2. USD/CAD moved almost equally in the opposite direction compared to AUD/USD and GBP/USD during the past week. This relationship has been the most pronounced between USD/CAD and GBP/USD.

3. The correlation between USD/CAD and EUR/USD was insignificant.

Bond Yield Spread

The yield on Canada’s 2-year government bonds went up as high as 0.603% on October 7th, or the highest level since September 19th (0.608%), after which it closed at 0.592% to add 1.1 basis points (0.011 percentage point) compared to October 6th.

Meanwhile, the yield on US 2-year government bonds climbed as high as 0.878% on October 7th, or the highest level since June 3rd (0.899%), after which it fell to 0.838% at the close to lose 1.6 basis points (0.016 percentage point) compared to October 6th.

The spread between 2-year US and 2-year Canadian bond yields, which reflects the flow of funds in a short term, narrowed to 0.246% on October 7th from 0.273% on October 6th. The October 7th yield spread has been the lowest one since September 30th, when the difference was 0.244%.

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 – 1.3310
R2 – 1.3321
R3 (Range Resistance – Sell) – 1.3333
R4 (Long Breakout) – 1.3368
R5 (Breakout Target 1) – 1.3410
R6 (Breakout Target 2) – 1.3427

S1 – 1.3286
S2 – 1.3275
S3 (Range Support – Buy) – 1.3263
S4 (Short Breakout) – 1.3228
S5 (Breakout Target 1) – 1.3186
S6 (Breakout Target 2) – 1.3169

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

Central Pivot Point – 1.3227
R1 – 1.3385
R2 – 1.3473
R3 – 1.3631
R4 – 1.3790

S1 – 1.3139
S2 – 1.2981
S3 – 1.2893
S4 – 1.2806

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

Central Pivot Point – 1.3077
R1 – 1.3332
R2 – 1.3535
R3 – 1.3790
R4 – 1.4044

S1 – 1.2874
S2 – 1.2619
S3 – 1.2416
S4 – 1.2212

TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

Related News