Forex Market: USD/CAD daily trading outlook

Friday’s trade saw USD/CAD within the range of 1.2964-1.3069. The pair closed at 1.3019, going up 0.32% on a daily basis. It has been the 53rd gain in the past 104 trading days and also the steepest one since May 19th, when the pair rose 0.46%. The daily high has been the highest level since May 25th, when a high of 1.3135 was registered. In weekly terms, USD/CAD lost 0.72% of its value during the past week. It has been the 15th drop in the past 21 weeks. The major pair has increased its advance to 4.13% so far during the current month, following three consecutive months of decline.

At 8:44 GMT today USD/CAD was edging up 0.20% on the day to trade at 1.3075. The pair touched a daily high at 1.3095 during the late phase of the Asian trading session and a daily low at 1.3026 during early Asian trade.

Canadas dollar continued to retreat against its US counterpart, as crude oil futures distanced from highs unseen since October 2015 ahead of the OPEC meeting. May 27th marked the 52nd drop in crude oil prices out of the past 115 trading days. Oil for July delivery went down as low as $48.69 per barrel on May 27th, making an almost exact test of the low from May 25th, and closed at $49.33, shedding 0.30% compared to Thursday’s close. As of 8:49 GMT today the commodity was edging down 0.34% to trade at $49.16, after going down as low as $49.08 per barrel earlier.

On Monday USD/CAD trading may be influenced by the following macroeconomic report as listed below.

Fundamentals

Canada

Producer Prices

Prices of industrial products in Canada probably rose at a monthly rate of 0.2% in April, according to market expectations. In March prices were down 0.6%, which has been a second consecutive month of decline. This index measures the change in prices of industrial goods, sold by manufacturers in the country. It is also used as an indicator of commodity inflation. In case a larger-than-anticipated increase in prices is reported, this would have a limited bullish effect on the local dollar, as the latter tends to be sensitive to changes in commodity prices. Statistics Canada is to release the official data at 12:30 GMT.

Correlation with other Majors

Taking into account the business week ended on May 27th 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 NZD/USD (0.5330, or strong)
USD/CAD to EUR/USD (0.2545, or weak)
USD/CAD to USD/CHF (0.0220, or very weak)
USD/CAD to AUD/USD (-0.0541, or very weak)
USD/CAD to USD/JPY (-0.5511, or strong)
USD/CAD to GBP/USD (-0.7646, or strong)

1. During the examined period USD/CAD moved strongly in the opposite direction compared to USD/JPY and GBP/USD.

2. USD/CAD moved strongly in one and the same direction with NZD/USD during the past week.

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

4. USD/CAD moved almost independently compared to USD/CHF and AUD/USD during the period in question. The correlation between USD/CAD and USD/CHF was almost non-existent.

Daily and Weekly Pivot Levels

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

R1 – 1.3029
R2 – 1.3038
R3 (range resistance) – 1.3048
R4 (range breakout) – 1.3077

S1 – 1.3009
S2 – 1.3000
S3 (range support) – 1.2990
S4 (range breakout) – 1.2961

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

Central Pivot Point – 1.3039
R1 – 1.3170
R2 – 1.3322
R3 – 1.3453

S1 – 1.2887
S2 – 1.2756
S3 – 1.2604