USDCAD resumes the downward trend after a short rebound the last trading sessions of the previous week. Canadian dollar helped by better than expected housing starts and the rally in crude oil prices Canada’s main export product. Canada Housing Starts seasonally adjusted rose by over 15% and came in at 245.600 beating the expectations of 210.000 in July, showing that Canada’s economy is recovering faster than the estimates.
Canada has announced a coronavirus relief package up to 300 billion (15% of GDP) while the Central Bank of Canada has expanded its balance sheet more than the Fed in an attempt to offset the coronavirus impact.
From the USA, the United States Producer Price Index in July came at 0.6% above the forecasts of 0.3%, while the yearly reading registered in at -0.4%, also above the expectations of -0.7%. The Producer Price Index excluding Food & Energy for the year came at 0.3% above the estimates of 0% in July. The Redbook Index jumped to 2.5% from the previous 1.1% in the week of August 7.
Crude oil continues its trip North as the economic data and especially from manufacturing continues to improve in Europe and USA. The WTI crude oil is 1.29% higher at 42.48, while the Brent crude oil is 1.33% higher at 44.99.
USDCAD Daily Technical Analysis
The USDCAD is 0.25% lower at 1.3316 resuming the downward trend and now points to further correction. USDCAD rebound stalled at 1.34 and the bears now are back in full power. Support for the pair stands at 1.3270 today’s low. The next target for USDCAD bears is at 1.3249 the low from August 6 trading session. Mor bids would emerge at 1.3228 the low from August 5.
On the contrary, initial resistance for USDCAD is at 1.3361 the daily top. Above that, more sellers await at 1.3395 the top from yesterday’s trading session. Next supply zone stands at 1.3496 the 50-day moving average.