Yesterday’s trade (in GMT terms) saw USD/CAD within the range of 1.3387-1.3516. The pair closed at 1.3413, losing 0.73% compared to Fridays close. It has been the 182nd drop in the past 386 trading days and also the steepest one since November 15th. The daily low has been a level not seen since November 10th, when a low of 1.3377 was registered. The major pair has trimmed its advance to a mere 0.03% during the current month, following a 2.14% surge in October.
At 8:19 GMT today USD/CAD was edging down 0.10% on the day to trade at 1.3400. The pair touched a daily high at 1.3435 during early European trade, undershooting the daily R2 level, and a daily low at 1.3396 during the mid phase of the Asian trading session.
On Tuesday USD/CAD trading may be influenced by the following macroeconomic reports as listed below.
Fundamentals
United States
Existing Home Sales
The index of existing home sales in the United States probably dropped 0.5% to a level of 5.43 million in October compared to September, according to the median estimate by experts. In September, sales were 3.2% higher from a month ago to reach 5.47 million, which has been the highest level since June. Sales of new single-family houses rose at a monthly rate of 4.1% to 4.860 million in September, while sales of condos went down 3.2% to 610 000. At the same time, the average sales price was 2.1% lower from a month ago.
In case the index dropped at a steeper monthly rate than anticipated, this would have a moderate bearish effect on the US dollar. The National Association of Realtors (NAR) is to release the official figure at 15:00 GMT.
Canada
Retail Sales
Retail sales in Canada probably rebounded at a monthly rate of 0.6% in September, according to the median forecast by experts, following an unexpected 0.1% drop in the prior month. August marked a third straight month of sales decline.
In August, lower sales were observed at motor vehicle and parts dealers (-0.5%), general merchandise stores (-0.9%), building material, garden equipment and supplies dealers (-0.5%) and clothing and clothing accessories stores (-0.5%). On the other hand, higher sales were registered at furniture and home furnishings stores (1.7%), health and personal care stores (0.7%) and gasoline stations (0.5%).
Retail sales, excluding sales of automobiles, probably rebounded 0.5% in September compared to August, after remaining flat in the preceding period. Large-ticket purchases are excluded due to their high volatility, which could influence the general trend. In case general retail sales rebounded at a faster rate than anticipated in September, this would have a moderate bullish effect on the Canadian dollar. Statistics Canada is to release the official report at 13:30 GMT.
Bond Yield Spread
The yield on Canada’s 2-year government bonds went up as high as 0.679% on November 21st, after which it closed at 0.674% to add 0.003 percentage point compared to November 18th.
Meanwhile, the yield on US 2-year government bonds climbed as high as 1.111% on November 21st, or the highest level in more than 2 years, after which it fell to 1.095% at the close to add 2.7 basis points (0.027 percentage point) compared to November 18th.
The spread between 2-year US and 2-year Canadian bond yields, which reflects the flow of funds in a short term, widened to 0.421% on November 21st from 0.397% on November 18th. The November 21st yield spread has been the largest one since January 25th, when the difference was 0.460%.
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 – 1.3425
R2 – 1.3437
R3 (Range Resistance – Sell) – 1.3448
R4 (Long Breakout) – 1.3484
R5 (Breakout Target 1) – 1.3525
R6 (Breakout Target 2) – 1.3542
S1 – 1.3401
S2 – 1.3389
S3 (Range Support – Buy) – 1.3378
S4 (Short Breakout) – 1.3342
S5 (Breakout Target 1) – 1.3301
S6 (Breakout Target 2) – 1.3284
By using the traditional method of calculation, the weekly levels of importance for USD/CAD are presented as follows:
Central Pivot Point – 1.3501
R1 – 1.3601
R2 – 1.3691
R3 – 1.3791
R4 – 1.3892
S1 – 1.3411
S2 – 1.3311
S3 – 1.3221
S4 – 1.3132
In monthly terms, for USD/CAD we have the following pivots:
Central Pivot Point – 1.3283
R1 – 1.3560
R2 – 1.3711
R3 – 1.3988
R4 – 1.4265
S1 – 1.3132
S2 – 1.2855
S3 – 1.2704
S4 – 1.2553
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