Key Points
- The US Dollar declined sharply from the 1.2940 level against the Canadian Dollar.
- The USDCAD pair broke an ascending channel pattern support at 1.2900 on the hourly chart.
- Recently in Canada, the New Housing Price Index (NHPI) for May 2017 was released by the Statistics Canada.
- The outcome was above the forecast, as New Housing Price Index posted an increase of 0.7% (MoM).
USDCAD Technical Analysis
The US Dollar came under heavy pressure and started a sharp downside move from the 1.2940 level against the Canadian Dollar. The USDCAD pair moved down and broke the 1.2850 support along with the 21 hourly simple moving average.
The pair traded as low as 1.2680 and started correcting above the 23.6% Fib retracement level of the last decline from the 1.2939 high to 1.2680 low.
At the moment, the pair is struggling to clear the 1.2770 level and the 38.2% Fib retracement level of the last decline from the 1.2939 high to 1.2680 low. And, the 21 hourly simple moving average might act as a hurdle around 1.2780-1.2800.
Canada’s New Housing Price Index
Recently in Canada, the New Housing Price Index (NHPI) for May 2017 was released by the Statistics Canada. The market was positioned for a rise of 0.3% in the index compared with the previous month.
The actual result was above the forecast, as New Housing Price Index posted an increase of 0.7%. In terms of the yearly change, there was an increase of 3.8%, more than the forecast of 3.5%. The report added that:
Toronto was the largest contributor to the national gain, rising 1.1% from April to May. Builders linked higher prices to market conditions, a shortage of developed land and higher construction costs.
Overall, the USDCAD pair may spike higher towards 1.2800 once the current consolidation is complete.
