USD/CAD daily chart with support and resistance lines on it. Click to enlarge:
- Housing Starts: Tuesday, 12:15. Housing starts sparkled in June, climbing to 246 thousand. However, the indicator softened in July, dropping to 222 thousand. The downward trend is expected to continue in August, with a forecast of 213 thousand.
- Building Permits: Tuesday, 12:30. This construction indicator tends to show large swings, which often results in forecasts which are wide of the mark. In June, building permits fell by 3.7%, marking a second straight decline. Investors are expecting a turnaround in July, with an estimate of a 2.1% gain.
- NHPI: Thursday, 12:30. This inflation index is a useful indicator of the health of the housing sector. The index has been lethargic in recent months, hovering around zero. The indicator has posted two straight readings of -0.1%. The estimate for July stands at 0.0%.
USD/CAD Technical Analysis
Technical lines from top to bottom:
We start with resistance at 1.3565.
1.3445 has held in resistance since the first week of June. This is followed by 1.3385.
1.3350 has held steady since mid-June and strengthened in resistance this week.
1.3265 switched to resistance role in mid-week, with USD/CAD recording sharp losses and breaking through several lines of support.
1.3175 is an immediate support line.
1.3125 (mentioned last week) has provided support since the end of July.
1.3048 is protecting the round number of 1.3000, which has psychological significance.
1.2916 has held firm since October.
1.2830 is the final support line for now.
I remain bullish on USD/CAD
The Canadian dollar finally enjoyed a winning week, after a long streak of weekly losses. Still, weak global conditions and the ongoing trade war between the U.S. and China could weigh on risk currencies like the Canadian dollar.
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