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During yesterday’s trading session USD/CAD traded within the range of 1.0964-1.1014 and closed at 1.0986.

At 08:50 GMT today USD/CAD was gaining 0.03% for the day to trade at 1.0982. The pair touched a daily high at 1.0993 at 02:15 GMT.

Fundamental view

United States

Housing starts in the US probably rose to 0.975 million units in March from 0.907 million units in the previous month, according to the median estimate of experts. As a start of construction is considered the beginning of construction works, excavation or development of the foundations of the building. The construction of houses, is considered to be initiated at the beginning of the excavation. The index started in 1992 and covers the whole territory of the country, regardless whether construction permits are needed.

Building permits probably increased to 1.015 million last month from 1.014 million in February. Housing statistics are calculated based on issued building permits, including those of local authorities. Not all regions of the country require building permits. The statistics reflects only those in which it is required. Ongoing studies related to construction only cover the percentage of work undertaken on the basis of permits. The majority of the data for the reporting period is not available at the time of publication and therefore does not provide statistical data for actually started construction works for the observed period.

The US Department of Commerce is expected to release its official data at 12;30 GMT today. Higher-than-expected readings will indicate that the US housing market started to recover from the recent slowdown due to the inclement weather. Signs of improving housing market conditions will certainly provide support for the greenback.

Canada

The Bank of Canada will probably keep its benchmark interest rate intact at 1.0% for a 29th consecutive time. The Bank of Canada holds its monetary policy in order to set the short-term interest rates. This is accomplished by changing the so-called “overnight” rate. This is the interest rate that major financial institutions pay as interest in the exchange of money between them overnight. Changes in the overnight rate influence other interest rates, such as interest rates on consumer loans, as well as those tied to mortgages. The purpose of the Canadian monetary policy is to maintain the level of inflation as measured by CPI on an annual basis and for this purpose the central bank works closely with the government. Since 1995 the target range is set between 1 and 3 percent. In November 2000, the bank introduced a system of eight fixed dates during the year, to discuss possible changes in interest rates. Decisions are taken by consensus. The Governing Council meeting usually starts on Friday, with the development of general economic analysis and future model of economic development, as well as identifying the trend and inflation. By the end of the day the bank announces its decision on the base rate and holds a press conference on the decision.

At 14:00 GMT, the Bank of Canada will announce its interest rate decision. In case the central bank preserves the main interest rate or in case the bank raises it, this will certainly heighten the loonie’s appeal.

Technical view

Screenshot from 2014-04-16 11:53:03

According to Binary Tribune’s daily analysis, in case USD/CAD manages to breach the first resistance level at 1.1012, it will probably continue up to test 1.1038. In case the second key resistance is broken, the pair will probably attempt to advance to 1.1062.

If USD/CAD manages to breach the first key support at 1.0961, it will probably continue to slide and test 1.0938. With this second key support broken, the movement to the downside will probably continue to 1.0912.

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