Canadian Dollar Gains On Positive House Data

Fundamental Analysis

* Housing Boost: The Canadian Dollar (CAD) is trading steadily but has seen modest gains against the US dollar following the release of unexpectedly strong housing data from Canada. Housing starts surged to a seven-month high of 264.5k on an annualized basis, exceeding the forecast of 247k. This increase was bolstered by intensified construction activities in apartments, townhouses, and condominiums in the country’s two largest provinces. Furthermore, rising oil prices, fueled by anticipated higher summer fuel demand, offered additional backing to the CAD, which is closely tied to commodities, given Canada’s significant role as a major oil exporter to the United States.

Technical Analysis

* Technical Breakout: USDCAD was traded lower while currently testing the support level 1.37250 and upward trendline. MACD which illustrate bearish bias signal suggest the pair to further extend its losses after it breaks below the support and the trend line.

* Resistance and Support: If the bearish momentum persists, there’s a strong likelihood that the price will potentially head towards 1.36650 after it breach below the level 1.37250 and upward trend line. Conversely, a potential retracement is also to be expected and the price could head back towards 1.37800.

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Potential Risks

Moving ahead, the market’s attention will be squarely on pivotal U.S. economic indicators like Retail Sales and Industrial Production scheduled for release later in the day. Additionally, a lineup of Federal Reserve speakers including Lisa Cook, Thomas Barkin, Adriana Kugler, Lorie Logan, Alberto Musalem, and Austan Goolsbee are slated to deliver speeches, potentially offering insights into the Fed’s future interest rate trajectory. These events are poised to shape market sentiment and guide investor decisions in the near term.

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Monitoring

Stay updated on US and Canada data, central bank updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.