USD/CAD Set to Start Bearish Retracement Amid Forecast of Improving Canadian Building Permits

USD/CAD – Technical Analysis for US Binary Options Brokers

Canada – Building Permits

On Tuesday, at GMT 1:30 p.m., Statistics Canada will publish the monthly Building Permits figure that measures the changes in the total number of new permits issued for constructing new premises in the country.

Since permits are mandatory to start building construction, the number of new permits acts as a leading indicator of the future construction activity in the country. Also, binary options traders consider that new constructions help energize the economy, as new buildings require materials from many other industries.

Last month, the amount of new Building Permits declined by as much as -2.5% and this month the forecast is set on growth of 4.2%.

United States – Producer Price Index

On Thursday, at GMT 1:30 p.m., the US Department of Labor will release the Producer Price Index (PPI) figure, which measures the changes in the price of products and services bought by manufacturers and service providers in the country.

Since the higher cost of production is usually passed on to the consumers, a rise in the producer price index indicates future inflation. Hence, this data is vital for US binary options brokers as it is used by binary options investors as a leading indicator of the overall US economy.

Last month, the US month-over-month PPI decreased by -0.1%, indicating deflationary pressure on the economy. Currently, the forecast for this month is set at 0.2% increase.

USD/CAD Forecast

USDCAD analysis for US binary options brokers

Since forming a bullish outside bar on April 13, 2017, the USD/CAD went up by around 450 pips. However, last week, the pair found strong resistance around 1.3775 level and formed a bearish outside bar. The formation of this bearish outside bar signals that there could be a retracement this week.

As the Canadian building permits figure is expected to increase by 4.2%, but the US PPI is only expected to increase by 0.2%, we believe it supports the bearish thesis as well. Under the circumstances, if the USD/CAD penetrates below the support level around 1.3635, it would likely attract additional bearish momentum in the market.

Hence, US binary options traders should look out for trading opportunities below this major support level around 1.3635.

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