Yesterday’s trade (in GMT terms) saw USD/CAD within the range of 1.3314-1.3386. The pair closed at 1.3380, edging up 0.22% compared to Tuesdays close. It has been the 192nd gain in the past 368 trading days and also a second consecutive one. The major pair has extended its advance to 1.92% so far during the current month, following a 0.18% gain in September.
At 8:10 GMT today USD/CAD was edging down 0.10% on the day to trade at 1.3367. The pair touched a daily high at 1.3396 during early Asian trade, overshooting the daily R2 level, and a daily low at 1.3366 during the early phase of the European trading session.
On Thursday USD/CAD trading may be influenced by the following macroeconomic reports as listed below.
Fundamentals
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 October 21st, probably dropped to 255 000, according to market consensus, from 260 000 in the preceding week. The latter has been the highest number of claims since the business week ended on September 9th.
The 4-week moving average, an indicator lacking seasonal effects, was 251 750, marking an increase by 2 250 compared to the preceding week’s revised up average.
The business week, which ended on October 14th, has been the 85th consecutive week, when jobless claims stood below the 300 000 threshold, which suggested a healthy labor market. It has been the longest streak since 1970.
Initial jobless claims number is a short-term indicator, reflecting lay-offs in the country. In case the number of claims met expectations or decreased further, this would have a moderate bullish effect on the US dollar.
The number of continuing jobless claims probably rose to the seasonally adjusted 2 068 000 during the business week ended on October 14th, according to the median forecast by experts, from 2 057 000 in the preceding week. The latter represented an increase by 7 000 compared to the revised up number of claims reported in the week ended on September 30th. 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.
Durable Goods Orders
The value of durable goods orders in the United States probably went up 0.1% in September from a month ago, according to the median forecast by experts. In August, the index performance has been revised up to a 0.1% gain from flat previously.
The value of shipments of manufactured durable goods, down after two straight months of increases, fell 0.4% (or USD 0.8 billion) to reach USD 231.7 billion in August. The value of unfilled orders for manufactured durable goods, down for a third consecutive month, fell 0.1% (or USD 1.5 billion) to reach USD 1,123.4 billion in August. At the same time, the value of inventories of manufactured durable goods, up for a second consecutive month, went up 0.1% (or USD 0.5 billion) during the period to USD 383.7 billion, according to data by the US Census Bureau.
Non-defense new orders for capital goods slumped 4.4% (or USD 3.1 billion) to USD 66.9 billion in August, while defense new orders for capital goods surged 23.6% (or USD 2.3 billion) during the month to USD 11.9 billion.
The value of durable goods orders, excluding transportation, probably rose 0.2% in September from a month ago, according to expectations, following a revised down 0.2% drop in August.
In case the general index rose at a faster-than-projected rate in September, this would have a strong bullish effect on the US dollar, due to positive implications in regard to the wider gauge of production, factory orders. The US Census Bureau is scheduled to release the official report at 12:30 GMT.
Pending Home Sales
The index of pending home sales in the United States probably rose 1.2% in September from a month ago, according to the median estimate by experts. In August, pending home sales dropped 2.4%, confounding market expectations of a 0.3% increase. In August, sales in the West fell 5.3%, those in the South went down 3.2%, while those in the Midwest region were 0.9% lower. On the other hand, sales in the Northeast area rose 1.3% during the same period.
In annual terms, contracts to buy previously owned homes in the United States were 0.2% fewer in August, following a 1.4% increase in July. The latter has been the sharpest annual increase since April.
In case pending home sales rose at a faster pace than anticipated in September, this would have a moderate bullish effect on the US dollar. The National Association of Realtor’s (NAR) will report on the official index performance at 14:00 GMT.
Bond Yield Spread
The yield on Canada’s 2-year government bonds went up as high as 0.563% on October 26th, after which it closed at 0.558% to add 1.5 basis points (0.015 percentage point) compared to October 25th.
Meanwhile, the yield on US 2-year government bonds climbed as high as 0.876% on October 26th, or the highest level since October 12th (0.891%), after which it fell to 0.872% at the close to add 1.6 basis points (0.016 percentage point) compared to October 25th.
The spread between 2-year US and 2-year Canadian bond yields, which reflects the flow of funds in a short term, widened to 0.314% on October 26th from 0.313% on October 25th. The October 26th yield spread has been the largest one since June 2nd, when the difference was 0.321%.
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 – 1.3387
R2 – 1.3393
R3 (Range Resistance – Sell) – 1.3400
R4 (Long Breakout) – 1.3420
R5 (Breakout Target 1) – 1.3443
R6 (Breakout Target 2) – 1.3452
S1 – 1.3373
S2 – 1.3367
S3 (Range Support – Buy) – 1.3360
S4 (Short Breakout) – 1.3340
S5 (Breakout Target 1) – 1.3317
S6 (Breakout Target 2) – 1.3308
By using the traditional method of calculation, the weekly levels of importance for USD/CAD are presented as follows:
Central Pivot Point – 1.3233
R1 – 1.3461
R2 – 1.3583
R3 – 1.3811
R4 – 1.4038
S1 – 1.3111
S2 – 1.2883
S3 – 1.2761
S4 – 1.2638
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
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