USD/CAD Appears Bearish Amid Lower than Expected US Existing Home Sales

United States – Existing Home Sales

Yesterday, at GMT 3:00 p.m., the US National Association of Realtors released  the existing home sales number, which is the annualized number of residential buildings that were sold during the last month in the country. However, this figure excludes the number newly building constructions.

Since the sale of an existing home usually has a wide-spread positive ripple effect in the local economy, collectively this figure acts as an excellent leading indicator of the overall economic health of the country. Therefore, binary options traders consider the existing home sales number to be an important data as it tends to have a considerable market impact.

Last month, the US existing home sales figure came out at 5.55 million and the forecast for this month was set at 5.39 million. However, the actual figure came out just shy of the forecast at 5.36 million.

Canada – Raw Materials Price Index

On Friday, at GMT 1:30 p.m., the Statistics Canada will release the month-over-month Raw Materials Price Index (RMPI), which measures the changes in the price of raw materials bought by manufacturers in the country over the past month.

Binary options investors consider the RMPI to be an important leading indicator of consumer inflation in Canada, because if manufacturers pay more to buy raw materials, then ultimately the retail customers end up paying for the higher cost of production.

Over the past several months, the Canadian RMPI has been gradually decreasing. But, in August and September, it came out better than expected. If the current trend continues, it would add additional bullishness to the Canadian Dollar.

Trade Recommendation for the USD/CAD

USDCADDaily

Although the USD/CAD was on a steady uptrend for the last several weeks, the uptrend found some sizable resistance around the 1.3550 level.  Yesterday, the USD/CAD price closed above the 1.3350 level. However, the bar looked more like a bearish pin bar as the closing price was below last week’s high.

As the US existing home sales figure came out lower than expected, it may encourage the USD/CAD bears to initiate a retracement move this week. In that situation, the price would likely to remain below the resistance around the 1.3350 level.

In that situation, it would be recommended that traders consider placing a PUT order for the USD/CAD with their binary options brokers once the price closes penetrates and closes below yesterday’s low, which is at 1.3335.

Recommended Broker: HighLow.net

About our Forex and Binary Options Analyst:  Asif Imtiaz

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes on various tech and financial topics. You can reach him at contact@asifimtiaz.com

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Asif Imtiaz

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes on various tech and financial topics. You can reach him at contact@asifimtiaz.com

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