The Housing Starts indicator is an important economic leading indicator, considered by analysts as a good measure of consumer spending. A higher reading than forecast by the market points to a growing economy and is bullish for the loonie.
Here are all the details, and 5 possible outcomes for USD/CAD.
Published on Tuesday at 13:15 GMT.
The Housing Starts indicator helps provide analysts and traders with critical information about the residential housing sector, which is an important component of the economy. As a house is likely to be the largest purchase that a consumer will make, this indicator provides a snapshot of the mood of consumers and the health of the economy.
The October reading came in at 206K, the highest figure in almost three years. This reading was well above the market prediction of 187K. The November forecast predicts a reading of 198K. Will the indicator again surpass the forecast and surprise the markets?
Sentiments and levels
Last week’s Canadian economic indicators were a mixed bag. GDP showed an increase, but employment figures were lower than expected. On a positive note, modest signs of a recovery in the US should help strengthen the loonie. So, the overall sentiment is neutral on USD/CAD towards this release.
Technical levels, from top to bottom: 1.0360, 1.0263, 1.0230, 1.0143, 1.0060 and .099.
- Within expectations: 193K to 203K: In such a case, USD/CAD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 204K to 209K: An unexpected higher reading can send USD/CAD below one support level.
- Well above expectations: Above 209K: A sharp increase could propel the pair below two or more support lines.
- Below expectations: 187K to 192K: A reading lower than forecast could push USD/CAD above one resistance level.
- Well below expectations: Below 187K: Given the overall strength of the Canadian economy, this scenario is unlikely. In this outcome, the pair would likely break two or more resistance levels.
For more on USD/CAD see the USD/CAD forecast.Get the 5 most predictable currency pairs