Forex Market: USD/CAD daily trading forecast

Yesterday’s trade saw USD/CAD within the range of 1.1336-1.1398. The pair closed at 1.1384, gaining 0.18% on a daily basis.

At 9:05 GMT today USD/CAD was up 0.21% for the day to trade at 1.1407. The pair touched a daily high at 1.1408 at 9:04 GMT.

Fundamentals

United States

Change in non-farm payrolls, unemployment rate

Employers in all sectors of economy in the United States, excluding the farming industry, probably added 232 000 new jobs in November, according to the median forecast by experts, after a job gain of 214 000 in October. If so, this would be the tenth consecutive month, when employment gains exceeded 200 000. Food services and drinking places added 42 000 jobs in October, compared with an average gain of 26 000 jobs per month over the prior 12 months. In October employment in retail trade rose by 27 000, in health care – by 25 000, in professional and business services – by 37 000. 15 000 jobs were added in the sector of manufacturing.

The non-farm payrolls report presents the total number of US employees in any business, excluding the following four groups: farm employees, general government employees, employees of non-profit organizations, private household employees. The reading, released most often, varies between + 10 000 and as much as + 250 000 at times when economy is performing well. Despite the volatility and the possibility of large revisions, the non-farm payrolls indicator presents the most timely and comprehensive reflection of the current economic state. Total non-farm payrolls account for 80% of the workers, who produce the entire Gross Domestic Product of the United States. In case of a larger-than-expected gain in jobs, the US dollar would certainly be supported.

Average Hourly Earnings probably increased 0.2% in November compared to October, when earnings rose by another 0.1%.

At the same time, the rate of unemployment in the country probably remained stable at 5.8% in November. The latter has been the lowest level in at least six years. In October the number of unemployed persons dropped to 9.0 million, according to the report by the Bureau of Labor Statistics. The number of long-term unemployed during the same month (those jobless for 27 weeks or more) was little changed at 2.9 million, while accounting for 32% of the total number of unemployed. The number of persons in part-time employment for economic reasons was almost unchanged in October at 7.0 million.

The unemployment rate represents the percentage of the eligible work force that is unemployed, but is actively seeking employment. A person who is not classified as employed or unemployed is excluded from the statistics. One counts as unemployed, if he falls in all of the following categories: he/she was unemployed during the last week; he/she is able bodied; he/she has been seeking employment for a period of at least four weeks, which end during the week when the research is conducted. People, who have been laid off and are awaiting to be hired again, are also classified as unemployed. In case the unemployment rate met expectations or even fell further, this would have a bullish effect on the greenback. The Bureau of Labor Statistics will release the official employment data at 13:30 GMT.

Balance of trade

The deficit on US trade balance probably contracted to USD 41.50 billion during October from a trade gap of USD 43.03 billion, registered in September. The latter has been the largest shortfall since May, when a figure of USD 44.66 billion was reported. In September total exports dropped USD 3.0 billion to reach USD 195.6 billion, while the total value of imports increased by USD 0.1 billion to USD 238.6 billion. The goods deficit expanded by USD 2.4 billion to USD 62.7 billion in September compared to a month ago, while the services surplus contracted by USD 0.6 billion to USD 19.6 billion.

The trade balance, as an indicator, measures the difference in value between the country’s exported and imported goods and services during the reported period. It reflects the net export of goods and services, or one of the components to form the Gross Domestic Product. Generally, exports reflect economic growth, while imports indicate domestic demand. In case the trade balance deficit shrank more than anticipated, this would boost demand for the US dollar. The Bureau of Economic Analysis will release the official trade data at 13:30 GMT.

Canada

Balance of trade

The surplus on Canadian trade balance probably contracted to CAD 0.20 billion during October from a surplus figure of CAD 0.71 billion in the prior month. If so, this would be the smallest surplus since May, when a figure of CAD 0.58 billion was reported. In September total exports climbed to CAD 44.8 billion, as volumes rose 1.6%, while prices edged down 0.4%, led by motor vehicles and parts, consumer goods as well as metal and non-metallic mineral products. At the same time, total imports dropped to CAD 44.1 billion, as volumes were down 1.0%, while prices dipped 0.6%. The main contributors to this registered decline in imports were energy products as well as metal and non-metallic mineral products, according to the Statistics Canada.

In case the nations trade balance produced a smaller surplus than projected, this would cause a bearish impact on the Canadian dollar. Statistics Canada will release the official trade data at 13:30 GMT.

Unemployment rate

The number of the employed people in Canada probably increased by 5 000 last month, according to market expectations. In October the number of the employed rose by 43 100. Part-time employment rose by 101 000 (or 3.0%) in October compared to the same month a year ago, while full-time employment was up 81 000 (or 0.6%) during the period. All of the employment gains in October were among people aged between 25 to 54, with most of the increase being among women in this age group. Employment was among youths aged between 15 to 24 remained little changed in October, but youth unemployment rate fell 0.9% to 12.6%, as fewer persons in this group sought employment, according to the report by the Statistics Canada. Creation of new job positions is considered of utmost importance for consumer spending. In case employment in the country increased at a faster pace than expected, the loonie would be supported.

Meanwhile, the rate of unemployment in the country probably rose to 6.6% in November. A month ago the jobless rate dropped to 6.5%, which has been the lowest level since November 2008, from 6.8% in September. Higher-than-expected rates of unemployment would have a bearish effect on the Canadian dollar. Statistics Canada is expected to release its official employment report at 13:30 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.1373. In case USD/CAD manages to breach the first resistance level at 1.1409, it will probably continue up to test 1.1435. In case the second key resistance is broken, the pair will probably attempt to advance to 1.1471.

If USD/CAD manages to breach the first key support at 1.1347, it will probably continue to slide and test 1.1311. With this second key support broken, the movement to the downside will probably continue to 1.1285.

The mid-Pivot levels for today are as follows: M1 – 1.1298, M2 – 1.1329, M3 – 1.1360, M4 – 1.1391, M5 – 1.1422, M6 – 1.1453.

In weekly terms, the central pivot point is at 1.1360. The three key resistance levels are as follows: R1 – 1.1500, R2 – 1.1584, R3 – 1.1724. The three key support levels are: S1 – 1.1276, S2 – 1.1136, S3 – 1.1052.