Key Highlights
- USD/CAD struggled to surpass 1.3270 and recently corrected lower.
- There was a break below a key bullish trend line at 1.3230 on the 4-hours chart.
- Canada’s Consumer Price Index is likely to increase 0.3% in Oct 2019 (MoM).
- EUR/USD and GBP/USD are currently showing bullish signs.
USD/CAD Technical Analysis
This month, the US Dollar climbed higher steadily after it surpassed 1.3200 against the Canadian Dollar. However, USD/CAD struggled to climb above 1.3270 and recently started a downside correction.
Looking at the 4-hours chart, the pair corrected below a couple of important supports near the 1.3250 and 1.3230 levels. Moreover, there was a break below a key bullish trend line at 1.3230.
The pair even tested the 50% Fib retracement level of the upward move from the 1.3115 low to 1.3270 high. On the downside, there are many key supports, starting with 1.3170 and the 100 simple moving average (red, 4-hours).
Besides, the 61.8% Fib retracement level of the upward move from the 1.3115 low to 1.3270 high is near the 1.3174 level. The next major support is near the 1.3150 level, below which the pair is likely to decline towards the 1.3100 area.
Conversely, USD/CAD could start a fresh increase from 1.3170 or 1.3150. On the upside, an initial resistance is near 1.3230. A successful break above 1.3230 might lead the price towards the 1.3250 and 1.3270 levels.
Fundamentally, the US Building Permits report for Oct 2019 was released by the US Census Bureau, at the Department of Commerce. The market was looking for no change in the Building Permits, compared with the last -2.4%.
However, the actual result was positive, as the US Building Permits increased 5% in Oct 2019 (seasonally adjusted annual rate of 1,461,000). Besides, privately‐owned housing starts increased 3.8%.
The report added:
Single‐family housing starts in October were at a rate of 936,000; this is 2.0 percent (±6.3 percent) above the revised September figure of 918,000. The October rate for units in buildings with five units or more was 362,000.
Overall, USD/CAD is likely to bounce back as long as above 1.3150. Looking at EUR/USD and GBP/USD, both are showing positive signs above 1.1050 and 1.2900 respectively.
Upcoming Economic Releases
- Canadian Consumer Price Index Oct 2019 (MoM) – Forecast +0.3%, versus -0.4% previous.
- Canadian Consumer Price Index Oct 2019 (YoY) – Forecast +1.9%, versus +1.9% previous.
