United States – The Conference Board (CB) Consumer Confidence Index
On Tuesday, at GMT 2:00 p.m., United States based Conference Board Inc. (CB) will release its consumer confidence index, which measures the changes in the level of a composite index by surveying 5,000 households in the United States.
The large sample size (5,000) of the survey makes it one of the most comprehensive research data regarding the consumer spending pattern in the country. Since consumer confidence is correlated with consumer spending, binary options traders pay close attention to the CB consumer confidence index.
Last month, the CB consumer confidence index reading came out at 95.2 and the forecast for May is currently set at near last month’s reading, at 95.2.
Canada – Overnight Rate
The Bank of Canada will release the overnight rate on Wednesday afternoon, at GMT 2:00 p.m. The overnight rate is the interest rate that banks and other financial institutes in Canada use to lend and borrow funds among themselves.
Binary options traders consider the overnight interest rate to be the paramount factor in the valuation of the Canadian Dollar against other major currencies. In fact, it is often stated that traders analyze all other fundamental data just to predict the future interest rate decision. Hence, any major change in the overnight interest rate may create large price swings on Wednesday.
In April, the Bank of Canada kept its overnight rate at 0.75% and the forecast for May is that the BOC will leave it unchanged.
Trade Recommendation for the USD/CAD
Since breaking the uptrend line in early April, the USD/CAD price had fallen towards the long-term uptrend line over the last 8 weeks. However, as soon as reaching the long-term uptrend line on May 14, the USD/CAD price bounced off the support around the 1.1950 level.
Currently, the USD/CAD price is approaching the resistance zone near 1.2375 with sufficient bullish momentum.
As the CB consumer confidence index and the BOE overnight rate is forecasted to remain unchanged, the fundamental outlook for the USD/CAD would remain neutral this week. Therefore, any technical indication of the continuation of the current uptrend can offer binary options investors with an opportunity to profit.
Under the circumstances, if the USD/CAD price penetrates above the 1.2375 level and the daily candlestick closes above this level, it would be recommended that binary options traders consider placing a CALL order with this pair.
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