With residential permits rising at the fastest since January, Poloz & Co might be getting a rougher ride on their “soft landing” expectations for the housing market.
The headline numbers beat even the most optimistic calls of a 5.0% rise.
The one saving grace for the BOC is that residential permit values are 9.0% lower than a year ago
Either way it keeps some pressure on USD/CAD which is testing some fairly strong bids at 1.0630/35
They’ll no doubt be some demand at 1.0600 but we’re now coming off 5 months of losses for the pair since the 1.12 highs.
The Jan 2014 run higher had a low of 1.0587 and we also have the 100 mma there too at 1.0580
USD/CAD monthly chart 07 07 2014
Adam’s been highlighting the potential for oversold conditions the last week or so and we’re showing some signs of stabilising at these levels around 1.0620/30
USD/CAD h4 chart 07 07 2014
There’s a good case for building a long from here down to the 100 mma and there’s going to be some decent support coming in at the old resistance levels around 1.0550/60. After that it could be a case of “run to the hills” and the 1.03’s
