Canada building permits expected to rise 2.4%
Against a slow trading day, the North American trading session will see the release of the Canadian building permits data for the month of November 2016. Economists are forecasting an increase of 2.4% on a month over month basis, coming off an 8.7% increase in October. According to Statistics Canada, municipalities issued $7.6 billion worth of building permits during the reported month led by an increase in higher construction intentions for commercial structures, most of which was concentrated in Alberta.
For November 2016, the pace of building permits is expected to show a slight moderation, increasing 2.4% from October
This is more than half of the gains seen the month before. Although building permits data does not rank high on the list, the second-tier data is quite likely to offer some short term volatility to USDCAD.
The U.S. dollar has been broadly weaker against the Canadian dollar especially with the currency seen extending the declines. By Monday’s close, USDCAD had retraced most of the gains that were made after the Fed hiked interest rates in December last year.
With the recent weakness in the U.S. dollar, it is not surprising to expect further short term declines in USDCAD, although there is scope for a near term upside risk on USDCAD, especially on a weaker building permits data.
How to trade binary
The USDCAD 60-minute chart shows prices currently bouncing off the support at 1.3200 on multiple occasions, while the subsequent highs have led to lower highs being formed. The descending triangle pattern that has formed as a result could indicate further declines to come.
To the upside, look for price to hit resistance near 1.3256 which could be tested in the near term, following which, USDCAD could be seen pushing lower to retest 1.3200 support level once again.
Therefore, purchasing daily PUT options near 1.3256 strike price for a 21:00 GMT expiry time could offer potential rewards as USDCAD will most likely retest the support at 1.3200 with the possibility of extending the declines even further on a break down below the support level.
Target price: 1.3256
Expiry: 21:00 GMT