Key Highlights
- The US Dollar recently failed to hold gains above 1.2800 versus the Canadian Dollar and started a downside move.
- There is a crucial bearish trend line forming with resistance at 1.2775 on the 4-hours chart of USD/CAD.
- Canada’s Housing Starts in Oct 2017 were 222.771 better than the forecast of 210.0K.
- Today, the US Initial Jobless Claims for the week ending Nov 4, 2017 will be released, which is forecasted to increase from 229K to 231K.
USDCAD Technical Analysis
The US Dollar recovered nicely from the 1.2702 low against the Canadian Dollar. However, the USD/CAD pair failed at 1.2818 and started a sharp downside move.
It seems like a crucial bearish trend line with resistance at 1.2775 on the 4-hours chart protected gains above 1.2810-20. The pair is now well below 1.2800, the 100 (red) and 200 (green) simple moving averages (hourly).
It recently broke the 50% Fib retracement level of the last wave from the 1.2702 low to 1.2818 high. Therefore, there are chances of further declines and the pair might even retest 1.2700. On the upside, the most important resistance is at 1.2775, followed by the 1.2800 handle.
Canada’s Housing Starts
Recently in Canada, the Housing Starts report for Oct 2017 was released by the Canadian Mortgage and Housing Corporation. The market was looking for the Housing Starts to be 210.0K in Oct 2017 compared with the same month a year ago.
The actual result was better than the forecast, as Housing Starts in Oct 2017 were 222.771. It was also above the last revised reading of 219.3K.
Commenting on the report, CMHC’s chief economist, Bob Dugan, stated:
The trend in housing starts essentially held steady in October following a decrease in September. Nevertheless, new home construction remains very strong in 2017, as the seasonally adjusted number of starts has been above 200,000 units in nine of ten months so far this year.
Overall, it seems like the USD/CAD might continue to move down towards the 1.2700 handle, and it could even break it for a new weekly low.
Economic Releases to Watch Today
Germany’s Trade Balance for Sep 2017 2017 – Forecast €21.1B, versus €21.6B previous.
Germany’s Imports of goods and services Sep 2017 – Forecast +0.3%, versus +1.2% previous.
Germany’s Exports of goods and services Sep 2017 – Forecast -1.1%, versus +3.1% previous.
US Initial Jobless Claims – Forecast 231K, versus 229K previous.
Canada’s New Housing Price Index (NHPI) for Sep 2017 (MoM) – Forecast +0.2%, versus +0.1% previous.
