Dollar/CAD moved up, correction previous losses as oil prices cooled down. The upcoming week features housing figures from Canada. Here are the highlights and an updated technical analysis for USD/CAD.
Canada reported a drop in the unemployment rate to 6.3%, but this wasn’t enough to mitigate the impact of the US jobs report. An OK NFP triggered a US dollar rally. The US dollar was on the back foot on the White House chaos. But for a change, the loonie was unable to take advantage of this. Oil prices fell from the highs it reached last week and this was the sign for the C$ to retreat.Updates:
USD/CAD daily graph with support and resistance lines on it. Click to enlarge:
- Housing Starts: Tuesday, 12:15. The Canadian housing sector has been rocked by reports of house price falls in Toronto. Nevertheless, the sector as a whole continues rising. Back in June, housing starts advanced to 213K. A small slide to 206K is on the cards now.
- Building Permits: Wednesday, 12:30. While this indicator is not as fresh as the housing starts one, it provides a wider scope. Also here, permits were up a whopping 8.9% in May. A drop of 1.8% is forecast now.
- NHPI: Thursday, 12:30. The third housing indicator of the week relates to prices of new homes. In May, the advance surprised for the second month in a row, with +0.7% after 0.8% beforehand. A slightly more modest rise of 0.5% is projected.
* All times are GMT
USD/CAD Technical Analysis
Dollar/CAD was unable to break below 1.2410, which establishes itself as strong support. From there, the pair went north.
Technical lines from top to bottom:
1.2860 was a relatively significant stepping stone on the way down, holding the pair for some time. It is followed by 1.2775, which marked a recovery attempt.
1.27 is a round number and also the top of a short-lived range. 1.2640 was the bottom of that range and a level where the pair reached after bouncing back.
1.2580 is a pivotal line and capped the pair temporarily on its recovery path. 1.2410 is a very strong line, serving as the low for 2017 (so far).
Further down, we find levels last seen in early 2015. These levels are 1.22 and 1.20.
I am bearish on USD/CAD
The Canadian dollar made the necessary fall after long weeks of gains. However, the Canadian economy looks great while the US is still embroiled in the political mess.
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