USD/CAD Appears Bearish, May Start a Retracement towards the Uptrend Line

Canada – Manufacturing Sales

Tomorrow, at GMT 1:30 p.m., the Statistics Canada will release the month-over-month manufacturing sales data, which measures the changes in the total value of sales made by Canadian manufacturers over the past month.

Since changes in manufacturing sales affect the manufacturers’ future decisions regarding hiring, corporate spending, and overall investment climate in the country, binary options traders consider the manufacturing sales data to be a leading indicator of the Canadian economy.

In November, the Canadian manufacturing sales figure decreased by 1.5%. If the figure comes out positive, it may help increase the valuation of the Canadian Dollar this week.

United States – Building Permits

On Wednesday, at GMT 1:30 p.m., the US Census Bureau will release the Building Permits figure, which is an annualized number of new building permits for the residential housing sector issued during the last month.

Since getting a building permit usually indicate future construction work, binary options investors consider this data to be a leading indicator of the overall economic activity in the country.

Last month, 1.16 million building permits were issued and this month, analysts are expecting the figure to come out around 1.16 million.

Trade Recommendation for the USD/CAD

USDCADDaily

Although the USD/CAD remained on an uptrend since the second week of October, the resistance level around 1.3450 kept it from gaining further grounds in November.  But, as soon as the USD/CAD price broke above the resistance level around 1.3450 on December 7, the price gained tremendous bullish momentum. As a result, the USD/CAD price appreciated by around 340 pips in the last week.

Given the sudden appreciation of the USD/CAD, there is good possibility that it will start a retracement move soon.

As the US building permits figure is expected to remain the same, if the Canadian manufacturing sales comes positive, it will set the fundamental outlook to bearish for the USD/CAD this week. On the other hand, the USD/CAD formed a bearish outside bar (BEOB) today, which is also indicating that a retracement is imminent.

Under the present circumstances, it would be recommended that traders consider placing a PUT order for the USD/CAD with their binary options brokers, once the price closes below today’s low, which is at 1.3675.

Recommended Broker: Porter Finance

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