FBS: comments on USD/CAD
USD/CAD closed yesterday below 1.3080 (23.6% Fibo of the advance from September 2012 to July 2013 and a very thin daily Ichimoku Cloud). Today the pair is testing levels below the support line from May. The pair’s now sitting at the support of the 100-day MA at 1.0330.
Canadian dollar climbed after data released on Monday showed that building permits rose by 20.7% to a record in July. Earlier on Friday the number of jobs in Canada increased forecast in about 3 times. These are the signs that the nation’s economy is gaining momentum. The housing start data released today came at almost the 2013 monthly average, but still were softly than expected that tempered the rally of loonie.
All in all, it’s necessary to trade according to the risk sentiment in the next few days. If the optimism persists, the pair may test the lower end of the bull range (1.0250). Note though, that USD/CAD got oversold and traders will likely unwind some of the recent shorts. The declines in oil prices as the situation in Syria calms down could also affect CAD. In addition, the approaching Fed’s meeting may also limit the losses of USD/CAD.
Support is at 1.0330 (100-day SMA), 1.0315 (Aug 19 low) and 1.0300 (psychological level). Resistance is at 1.0380 (daily high) and 1.0400 (psychological level).
Chart. Daily USD/CAD