Forex Market: USD/CAD daily forecast

During yesterday’s trading session USD/CAD traded within the range of 1.0836-1.0882 and closed at 1.0850.

At 11:59 GMT today USD/CAD was gaining 0.18% for the day to trade at 1.0863. The pair touched a daily high at 1.0863 at 11:48 GMT.

Fundamental view

The cost of living in the US probably increased 2.0% in May compared to the same month a year ago, according to the median analyst’ estimate. The Consumer Price Index (CPI) measures the change in prices of a range of products in different categories of consumer spending, such as food, clothing, rent and medical care and etc. It excludes investment costs, such as purchases of stocks and bonds, real estate and business expenses. Life insurance is also excluded from the scheme, although health insurance, property tax and motor vehicles are present in the study. Purchases of homes, antiques and collectibles are also treated as investment costs and are therefore excluded from the study. In the compilation of the index, the urban area of the United States is divided into 38 geographic areas called index areas, all goods and services purchased by the population are divided into 211 categories. It is expressed as a percentage change from the corresponding month a year earlier.

The core CPI probably rose 1.8% in May from a year ago, according to the median forecast by experts. The core CPI, excludes prices for food and energy, because they are the two most volatile components in the CPI. For this reason, many analysts prefer to use core inflation for their objectives. Expressed as a percentage change from the corresponding month a year earlier. The US Bureau of Labor Statistics is scheduled to release its report at 12:30 GMT in Washington. Higher-than-expected readings will certainly heighten greenback’s appeal.

In addition, building permits probably increased to an annualized pace of 1.060 million units last month from 1.059 million in April, that was lower than initially reported. 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 can be seen as signs of improving housing market conditions and will certainly provide support for the greenback.

Moreover, housing starts in the US probably declined to an annualized pace of 1.033 million units in May from 1.072 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.

Technical view

According to Binary Tribune’s daily analysis, in case USD/CAD manages to breach the first resistance level at 1.0876, it will probably continue up to test 1.0902. In case the second key resistance is broken, the pair will probably attempt to advance to 1.0922.

If USD/CAD manages to breach the first key support at 1.0830, it will probably continue to slide and test 1.0810. With this second key support broken, the movement to the downside will probably continue to 1.0784.