USD/CAD Stays Close To 1.2700

U.S. Dollar Is Mostly Flat Against Canadian Dollar

USD/CAD continues to trade near the 50 EMA at 1.2685 while U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index is stuck near the support level at the 50 EMA at 95.80. If the U.S. Dollar Index declines below this level, it will gain additional downside momentum and head towards the support level at 95.40 which will be bearish for USD/CAD.

Today, foreign exchange market traders focused on the economic data from U.S. Initial Jobless Claims report indicated that 248,000 Americans filed for unemployment benefits in a week compared to analyst consensus of 219,000. Continuing Jobless Claims declined from 1.62 million to 1.59 million.

Housing Starts declined by 4.1% month-over-month in January compared to analyst consensus which called for a decline of 0.5%. Building Permits increased by 0.7% month-over-month.

Traders also focused on the tensions over Ukraine, which sent gold to the $1900 level but failed to provide additional support to the American currency. The reason for this is the pullback in Treasury yields, which was triggered by the safe-haven buying of the U.S. government bonds. In case Treasury yields continue to move lower in the upcoming trading sessions, the U.S. dollar may find itself under pressure.

Technical Analysis

USD to CAD has recently made another attempt to settle below the 50 EMA at 1.2685. In case USD to CAD manages to settle below this level, it will move towards the next support level at 1.2650.

A successful test of the support at 1.2650 will open the way to the test of the next support at 1.2625. If USD to CAD gets below this level, it will move towards the next support level which is located at 1.2590.

On the upside, a move above the 20 EMA at 1.2700 will push USD to CAD towards the resistance level at 1.2710. In case USD to CAD gets back above 1.2710, it will head towards the resistance at 1.2730. A successful test of this level will push USD to CAD towards the resistance at 1.2760.

For a look at all of today’s economic events, check out our economic calendar.