Canada housing permit values fell 5.5% in August following a revised 2.8% drop in July. Total residential permit values fell 2.8% m/m in August, while non-residential values tumbled 10.0%. Canada housing starts fell to 217.1k in September from the 223.2k unit pace in August. The slowing was roughly as expected. Single unit starts grew 8.2% to a 67.5k unit rate in September, but multiple urban starts fell 10.7% to a 131.4k units rate in September. The six-month average for starts slowed to 214.8k units from 220.6k units, the first moderation following gains for the previous eight months. Starts growth remains firm on a national basis, despite high-profile volatility in certain regions (Vancouver, GTA).
Meanwhile, USDCAD has taken its cue from WTI crude prices, which continue to advance, trading at session highs of $50.59. The pairing has dipped to 1.2485 lows, coming from overnight highs of 1.2555. Further downside is likely to be limited going forward, as the market has largely re-evaluated the BoC policy outlook, where additional rate hikes are expected to be delayed. Additionally, only a break below the 50-day moving average,which currently is at 1.2463 and provides a support level, could suggest a possible trend reversal. However a stronger support level is 1.2420, which is below recent down fractal.
Therefore only a break below that imply that USDCAD is getting in a downtrend. Hence the pair is likely to remain in the strong Uptrend observed on the Chart above, since trend-line along with 50-Day MA still hold, with the pair moving in the upper Bollinger Pattern area since September 22. The MACD remains positive since October 3, while Stochastic is still above 50 despite today’s weakness.
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