USD/CAD May Turn Bullish If Price Closes Above Last Week’s Resistance

Canada – Raw Materials Price Index

Today, at GMT 1:30 p.m., the Statistics Canada will release the month-over-month Raw Materials Price Index (RMPI), which measures the changes in the price of raw materials bought by manufacturers in the country over the past month.

US Binary options traders consider the RMPI to be an important leading indicator of consumer inflation in Canada, because if manufacturers pay more to buy raw materials, then ultimately the retail customers end up paying for the higher cost of production.

Over the past several months, the Canadian RMPI has been gradually decreasing. But, in April, it came out better than expected. If the current trend continues, it would likely add additional bullishness to the Canadian Dollar.

United States – Institute for Supply Management (ISM) Manufacturing PMI

On Wednesday, at GMT 3:00 p.m., the Institute for Supply Management released its manufacturing PMI figure for the United States. The ISM’s US manufacturing PMI measures the level of a diffusion index based on a survey of 400 purchasing managers.

Purchasing managers in the United States are involved in the supply side of the economy. As most companies reduce their expenses and production based on their sales forecast, the survey of purchasing managers reveals the overall optimism of various companies in the country. Hence, binary options investors can easily figure out the sentiment regarding the economic condition in the country from the ISM manufacturing PMI readings.

Last month, the ISM manufacturing PMI for the United States came out at 50.8 and the forecast for this month is currently set at 50.6.

Trade Recommendation for the USD/CAD

USDCADDaily

After remaining in a strong downtrend since January 2016, the USD/CAD price finally broke above the downtrend line on May 3. Since then, the USD/CAD price has retraced around 460 pips and reached the psychologically important resistance level around the 1.3190.

After reaching near the 1.3190 level, the USD/CAD formed a small bearish outside bar (BEOB), which pushed the price towards the 1.2950 support level. Right now, the USD/CAD appears to be ranging between the 1.2950 and 1.3190 levels.

As the Canadian RMPI figure remains tentative and the US ISM manufacturing PMI figure is expected to come slightly lower compared to last month, the fundamental outlook for the USD/CAD would likely remain bearish today. However, binary options traders should consider the fact that the USD/CAD is now trading in a tight range and any breakout in any direction could attract additional momentum in the market.

Under the circumstances, it would be recommended that binary options traders consider placing a CALL order for the USD/CAD with their binary options brokers once the price closes above the 1.3190 level.

Recommended Broker for US traders: Finpari

Tagged with:

Leave a Comment

All content, design, and layout are Copyright © 2013 - 2016. All Rights Reserved. USBinaryOptions.com is owned and operated by AD Entertainment, a company registered in England / Wales ( United Kingdom ).
About Us - Sitemap - Contact Us - Disclaimer- Terms & Conditions