Key Highlights
- The US Dollar after trading as low as 1.2413 on 26th July 2017 against the Canadian Dollar started an uptrend.
- There is a major ascending channel pattern with support at 1.2730 forming on the 4-hours chart of USD/CAD.
- The Net Long-Term TIC Flows for June 2017 released recently in the US posted $34.4B, more than the forecast of $28.3B.
- Today, the US Housing Starts Change for July 2017 will be released, which is forecasted to increase by 0.5%.
USDCAD Technical Analysis
August 2017 is turning out to be bullish for the US Dollar versus the Canadian dollar. The USD/CAD pair after forming a bottom near 1.2420 started an uptrend and currently trading above 1.2700.
The upside move was steady, and during the rise there was a break above the 1.2600 resistance and the 100 simple moving average (H4). The pair is following a major ascending channel pattern with support at 1.2730 on the 4-hours chart.
On the upside, there is also a connecting resistance trend line positioned at 1.2780. It seems like a contracting triangle with resistance at 1.2780 is formed inside the channel.
On the downside, an initial support is around the 23.6% Fib retracement level of the last wave from the 1.2652 low to 1.2778 high.
To sum up, the pair is likely to remain in the uptrend and it may soon trade towards 1.2800 in the near term.
US Net Long-Term TIC Flows
Recently in the US, the Long-Term TIC Flows report for June 2017 was released by the US Department of Treasury. The market was looking for the Net Long-Term TIC Flows to be $28.3B, down from the last $91.9B.
The actual result was a touch above the forecast, as the Net Long-Term TIC Flows were $34.4B in June 2017. The total Net TIC Flows were $7.7B, down from the last revised reading of $54.7B.
The report pointed out that:
Foreign residents increased their holdings of long-term U.S. securities in June; net purchases were $35.3 billion. Net purchases by private foreign investors were $20.8 billion, while net purchases by foreign official institutions were $14.5 billion.
The market sentiment is mostly positive for the greenback, and USD/CAD is likely to gain traction for a run towards 1.2800.
Today’s US Housing Starts Change for July 2017 might impact the US Dollar. Any major rise in the Housing Starts in July 2017 could lift the bullish sentiment further for USD/CAD.
