USDCAD Forecast: Canadian dollar higher on stronger business optimism

Kenny Fisher MarketPulse

The Canadian dollar has posted gains in the Tuesday session. Currently, USD/CAD is trading at 1.2950, down 0.31% on the day. On the release front, Canadian Foreign Securities was dismal, with a gain of just C$2.82 billion. This was much smaller than the estimate of C$10.05 billion. In the U.S, there are on major events on the schedule. JOLTS Job Openings is expected to dip to 6.90 million. The markets are still waiting for the U.S Treasury to release its semi-annual currency report, which may occur later on Tuesday. On Wednesday, Canada releases Manufacturing Sales. The U.S will release Building Permits and Housing Starts, and the Federal Reserve will publish its minutes from the September policy meeting.

USD/CAD has lost ground this week, as the Canadian dollar has recovered most of last week’s losses. The currency received a boost from an optimistic Bank of Canada business survey on Monday. The poll found that businesses expect higher sales for both domestic and foreign customers. Companies are reporting increased investment and hiring, and the mood is optimistic in the business sector. Investors are keeping an eye on the BoC, which set the benchmark rate next week. The markets are widely expecting the BoC to raise rates by a quarter-point, which would match the Fed rate hike in September.

U.S data were a mixed bag on Monday, as retail sales were soft but manufacturing data was solid. Retail Sales posted a meager gain of 0.1%, shy of the estimate of 0.4%. Core Retail Sales surprised with a decline of 0.1%, compared to an estimate of 0.4%. This marked the first decline since June 2017. There was better news from the manufacturing front, as Empire State Manufacturing Index strengthened to 21.1, above the estimate of 20.4 points.

Asia Market update : A time out

Risk remains on the back foot

The buck cannot find a bid

USD/CAD Fundamentals

8:30 Canadian Foreign Securities Purchases. Estimate 10.05B
9:15 US Capacity Utilization Rate. Estimate 78.2%
9:15 US Industrial Production. Estimate 0.2%
10:00 US JOLTS Job Openings. Estimate 6.90M
10:00 US NAHB Housing Market Index. Estimate 68
16:00 US TIC Long-Term Purchases. Estimate 50.3B
16:15 US FOMC Member Mary Daly Speaks
Tentative – US Treasury Currency Report
8:30 Canadian Manufacturing Sales
8:30 US Building Permits. Estimate 1.28M
8:30 US Housing Starts. Estimate 1.21M
10:30 US Crude Oil Inventories
12:10 US FOMC Member Lael Brainard Speaks
14:00 US FOMC Meeting Minutes

Open: 1.2991 High: 1.2999 Low: 1.2950 Close: 1.2950

USD/CAD Technical

S3	S2	S1	R1	R2	R3
1.2649	12733	1.2831	1.2970	1.3067	1.3198

USD/CAD ticked higher in the Asian session. The pair has posted losses in the European session and is steady early in North American trade

1.2831 is providing support
1.2970 has switched to a resistance line after losses by USD/CAD
Current range: 1.2831 to 1.2970

Further levels in both directions:

Below: 1.2831, 1.2733 and 1.2649
Above: 1.2970, 1.3067, 1.3198 and 1.3292

Author

Kenny Fisher

MarketPulse

A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities.

EUR/USD stays defensive below 1.1900 as USD recovers

EUR/USD trades in negative territory for the third consecutive day, below 1.1900 in the European session on Thursday. A modest rebound in the US Dollar is weighing on the pair, despite an upbeat market mood. Traders keep an eye on the US weekly Initial Jobless Claims data for further trading impetus.

GBP/USD holds above 1.3600 after UK data dump

\GBP/USD moves little while holding above 1.3600 in the European session on Thursday, following the release of the UK Q4 preliminary GDP, which showed a 0.1% growth against a 0.2% increase expected. The UK industrial sector activity deteriorated in Decembert, keeping the downward pressure intact on the Pound Sterling.

Gold sticks to modest intraday losses as reduced March Fed rate cut bets underpin USD

Gold languishes near the lower end of its daily range heading into the European session on Thursday. The precious metal, however, lacks follow-through selling amid mixed cues and currently trades above the $5,050 level, well within striking distance of a nearly two-week low touched the previous day.

Cardano eyes short-term rebound as derivatives sentiment improves

Cardano (ADA) is trading at $0.257 at the time of writing on Thursday, after slipping more than 4% so far this week. Derivatives sentiment improves as ADA’s funding rates turn positive alongside rising long bets among traders.

A tale of two labour markets: Headline strength masks underlying weakness

Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.

Sonic Labs’ vertical integration fuels recovery in S token

Sonic, previously Fantom (FTM), is extending its recovery trade at $0.048 at the time of writing, after rebounding by over 12% the previous day. The recovery thesis’ strengths lie in the optimism surrounding Sonic Labs’ Wednesday announcement to shift to a vertically integrated model, aimed at boosting S token utility.