Forex: USD/CAD awaits plethora of US data

on Nov 27, 2013
Updated: Oct 21, 2019

**, Wednesday 27 November:**

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In today’s morning note, the European head of FX strategy at BMO Capital Markets, Stephen Gallo, opines that trade in the USD/CAD should be “fairly quiet” until release of the Canadian GDP numbers on Friday.
According to Gallo the critical mark of 1.06 is still “the key topside resistance level to monitor where there are rumoured to be Option related barriers rolling off towards the end of this week.” He remains bullish on the pair to year-end and favours buying dips for now. “1.0500 should be initial support on the day, although we do hear of System stops building a little lower, starting at 1.0470.”

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Heading off into today’s European session, the USD/CAD is trading around 1.0558, up 0.17 percent intraday. So far today, the pair has been confined within a relatively tight range, from 1.054 to 1.0561, as traders await a welter of US economic data before placing their bets for the day.

US Durable Goods Orders for October is due out at 13.30 UTC, with expectations for the non-Core reading to drop by 1.5 percent m/m, following September’s gain by 3.8 percent. The anticipated decline is being attributed to fewer orders for new Boeing aircraft, down from September’s 127 new purchases to just 79 in October.
In contrast, analysts project Core orders to post growth of 0.5 percent m/m after the prior month’s decline by 0.2 percent. The core metric excludes transportation purchases, the volatility of which can distort the underlying trend.

“On balance, indicators for growth in durable goods orders outside of transportation in October point in a positive direction,” say economists at Credit Agricole. The French investment bank bases its call on the fact that the new orders component in the October ISM Manufacturing Survey was slightly above September’s level with a strong reading of 60.6, “while regional Fed surveys were also optimistic”.

US Unemployment Insurance Initial Claims for last week will also be released at 13.30 UTC, with forecasts for a rise of 8,000 to 331,000.
The Final UoM US Consumer Sentiment for November is due at 14.55 UTC, with consensus for a modest increase to 73.1 from the initial estimate of 72.0. Analysts’ expectations range from 72.0 to 76.0, indicating a distinctly positive bias among economists and with none predicting a lower figure than the preliminary reading.
However, yesterday’s downbeat CB Consumer Confidence reading should have reminded traders of the old adage about not counting chickens.
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