USD/CAD daily chart with support and resistance lines on it. Click to enlarge:
- Housing Starts: Tuesday, 12:15. In May, housing starts slowed to 202 thousand, down from 235 thousand a month earlier. The June forecast stands at 209 thousand.
- Building Permits: Tuesday, 12:30. Building permits tend to show strong swings from month-to-month, making accurate forecasts a tricky task. In April, the indicator shot up 14.7%, its strongest gain since February 2016.
- BoC Rate Decision: Thursday, 12:30. The BoC has not raised rates since October, and the markets are expecting rate-setters to hold the course at the upcoming meeting. The Bank will release a rate statement along with the monetary policy report. This will be followed by a press conference with BoC Governor Stephen Poloz. If the BoC sounds dovish about economic conditions, the Canadian dollar could lose ground.
- NHPI: Friday, 14:30. The New Housing Price Index is a useful gauge of the strength of the housing market. The index has been flat, with readings of zero in nine of the past 10 releases. Will we see any improvement in the upcoming release?
* All times are GMT
USD/CAD Technical Analysis
Technical lines from top to bottom:
1.3445 (mentioned last week) has some breathing room after strong gains by USD/CAD last week.
1.3385 is next. Close by is 1.3350.
1.3265 switched to a resistance role in mid-June.
1.3175 was a swing low in late November.
1.3125 was a low point earlier in November.
1.3048 remained relevant during the week. This line has provided support since late October. 1.2916 is next.
1.2831 is next.
1.2729 is the final support level for now.
I am bullish on USD/CAD
The Canadian dollar enjoyed a spectacular June, gaining over 3.0%. Investors will be keeping a close eye on the BoC, which is expected to hold the course on rates. If policymakers sound dovish about economic conditions, investors could respond by sending the Canadian currency dollar lower. The strong U.S. employment numbers for June could delay a rate cut from the Fed, which is good news for the greenback.
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