CAD
Housing Starts came in 175K, beating expectations of 165K. The previous report was also revised more favorably from 159K to 165K.
Despite the positive news in housing starts, building permits declined 4.6%, worse than the expected -2.6%.
The Bank of Canada Business Outlook Survey was also released, stating “The results of the winter survey provide some evidence that confidence in the recovery is growing. While the balance of opinion on future sales is little changed, and respondents still expect the recovery to be gradual, more firms are planning to increase investment spending and employment than in the previous two surveys.”
CAD lost strength in the early part of the US session as oil was declining. This may just prove to be a cheaper price for the CAD versus the USD, but the CAD could certainly fall further from its technically overbought levels.
Look to sell USDCAD off of resistance. There is resistance from previous highs at 1.0330, 1.0370, and 1.0405. These also line up with Fibonacci retracement levels, drawn on the more recent downtrend from 1.0576 to 1.0250. Further, USDCAD has been declining in a channel, so look for the top of the channel to act as resistance as well.
