The US Dollar (USD) extended upside movement against the Canadian Dollar (CAD) on Tuesday, increasing the price of USDCAD to more than 1.3200 following the release of some key economic news. The technical bias remains bullish because of a higher low and higher high in the recent wave.
As of this writing the pair is being traded around 1.3229. A support can be seen around 1.3196-1.3200, the confluence of horizontal support area as well as psychological number. A break and daily closing below 1.3200 shall incite renewed selling pressure, validating a move towards the 1.3080 support area which is the swing low of the last major downside move as demonstrated in the give below daily chart.
On the upside, the pair is expected to face a hurdle around 1.3309, the horizontal resistance area ahead of 1.3400 the psychological number and then 1.3598, the swing high of the last major upside rally. The technical bias shall remain bullish as long as the 1.3080 support area is intact.
Canadian Building Permits
The value of Canadian building permits edged down in November due to lower construction intentions in Alberta following a surge the month before ahead of provincial building code changes, data from Statistics Canada showed on Tuesday. The 0.1 percent decrease was not as large as economists’ forecasts for a decline of 5.0 percent, while October was revised up to a gain of 10.5 percent from the previously reported 8.7 percent. A 1.6 percent decline in residential building permits led the way lower in November as construction plans for both single-family and multi-family buildings fell.
Considering the overall the technical and fundamental outlook buying the pair around current levels appears to be a good strategy in short to medium term.