AUDCAD Appears Bearish Amid Forecast of Rebounding Canadian Building Permits

AUDCAD – Binary Options Technical Analysis

Australia – Cash Rate

Tomorrow, at 5:30 a.m., the Reserve Bank of Australia (RBA) will release the official cash rate, which is the interest rate that major Australian banks and financial institutions pay to borrow funds held at the RBA.

Since short-term interest rates are the primary factor in the valuation of the Australian Dollar against other major currencies, binary options investors pay close attention to any changes in the official cash rate.

The RBA last time cut its cash rate was in August 2016, when it was reduced to 1.50% from 1.75%. The forecast for this month is that the RBA will leave the cash rate unchanged for the time being.

Canada – Building Permits

On Thursday, at GMT 1:30 p.m., Statistics Canada will publish the monthly Building Permits figure that measures the changes in the total number of new permits issued for constructing new premises in the country.

Since permits are mandatory to start building construction, the number of new permits acts as a leading indicator of the future construction activity in the country. Also, binary options traders consider that new constructions help energize the economy, as a new buildings require materials from many other industries.

Last month, the amount of new Building Permits declined by as much as 5.5% and this month the forecast is set on growth of 2.1%.

Trade Recommendation for the AUDCAD

AUDCAD - binary options analysis

Since forming a bullish pin bar on May 26, the AUDCAD has been on a strong uptrend, and formed a well-respected uptrend line in the process. During this uptrend, the AUDCAD climbed around 735 pips. The uptrend ended after the pair found strong resistance near historical pivot zone around 1.0050 level, where it produced a bearish outside bar.

Over the last two weeks, the AUDCAD had been consolidating after breaking below the uptrend line. Last Friday, the pair formed a bearish outside bar (BEOB) that signaled an additional bearish move in the coming days.

As the Canadian building permits figure is expected to rebound this week, and the RBNZ would likely to keep its cash rate at 1.5%, the fundamental outlook for the AUDCAD would also remain bearish for the next few days.

Under the circumstances, it would be recommended that binary options traders consider placing a PUT order for the AUD/CAD with their binary options brokers as soon as the price and closes below the low of Friday’s BEOB bar, which is at 0.9821 level.

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