Canada housing starts surged to a 253.7k unit rate in March from a revised 214.3k pace in February. The robust pace in March came in well above expectations for a much more modest gain, and leaves starts running at the strongest pace since the 2008-09 recession, and the strongest since the 288.6k rate in September of 2007. The ever-volatile multi-unit starts category drove the gain in total starts, as multi-units shot 30.2% higher to a 161.0k growth rate in March. The CMHC economist said the improving growth trend is reflected in single and multi-unit trend starts for Ontario and new apartments in Quebec. This is yet another strong report for Canada’s housing market, sure to keep concerns over regional “bubbles” elevated.
USDCAD largely shrugged off the stronger Canadian housing starts figures, though has eased to intraday lows of 1.3356 on the back of higher oil prices. WTI crude topped at one-month highs of $52.99. An improved risk backdrop has aided the CAD as well.
GBPCAD on the other hand dove to 1.6567 on the announcement of Canadian data, however it seems that it found support at this level, which is also the confluence of 200 period EMA in the 4-hour chart. Hence, the 4-hour chart in the GBPCAD prompted a LONG position due to this failure of breaking the 200-period EMA and given the high WTI crude prices. The tensions in Syria and in general the geopolitical news is a supportive factor for WTI crude prices.Hence an entry was taken at 1.6576. Based on a 14 period ATR number, target was set at 1.6620, which is also the confluence of 20-Day EMA. Target 2 is at 1.6660 which is the confluence of the 38.2 Fibonacci level. RSI is at 36, while the Williams’ Percentage range moves in the overbought territory, which suggest a LONG position on these time frames. Support is at 1.6510 – 1.6530 area.
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