USD/CAD daily chart with support and resistance lines on it. Click to enlarge:
- Housing Starts: Monday, 13:15. Housing Starts slipped to 197 thousand in January, falling below the 200-thousand level for the first time since March 2019. The February estimate stands at 200 thousand.
- Building Permits: Monday, 13:30. Building Permits have declined for three consecutive months, pointing to weakness in the construction industry. In November, the indicator declined by 2.4%, missing the forecast of a 1.0% gain. Analysts are expecting a rebound in December, with a forecast of a 3.5% gain.
USD/CAD Technical Analysis
Technical lines from top to bottom:
We start with resistance at 1.3660, which held since December 2018. 1.3550 is next.
1.3445 has remained intact since June 2019. This is followed by 1.3385.
The round number of 1.3300 has served in a resistance role since early December.
1.3265 has switched to a support role following gains by USD/CAD last week.
1.3150 is the next support level.
1.3100 (mentioned last week) has some breathing room in support.
1.3048 is protecting the symbolic 1.3000 level.
1.2950 is the final support level for now.
I remain bullish on USD/CAD
The Canadian dollar slipped 2 percent in January and continues to lose ground so far in February. With the coronavirus continuing to cause turmoil in global markets, risk appetite is likely to remain weak, which is bearish for the Canadian dollar.
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