The USD/CAD is under pressure
Jason Lubin January 1, 2021 10:00 AM
If the USD/CAD finds support at 1.2690, it could be the beginning of trading range.
The US Dollar was bullish against most of its major pairs on Thursday with the exception of the AUD, CAD and GBP. On the US economic data front, Initial Jobless Claims dropped to 787K for the week ending December 26th (835K expected), from a revised 806K in the previous week. Finally, Continuing Claims fell to 5,219K for the week ending December 19th (5,370K expected), from a revised 5,322K in the week before.
On Friday, US markets will be closed to observe New Years Day.
The Euro was bearish against all of its major pairs. In Europe, no major economic data was released.
The Australian dollar was bullish against most of its major pairs with the exception of the GBP.
Regarding the week's U.S. economic data front:
Wholesale Inventories fell 0.1% on month in the November preliminary reading (+0.6% expected), compared to a revised +1.2% in the October final reading.
Market News International's Chicago Business Barometer unexpectedly rose to 59.5 on month in December (56.3 expected), from 58.2 in November.
Finally, Pending Home Sales declined 2.6% on month in November (0% expected), compared to a revised -0.9% in October.
From a technical point of view, on a daily chart, the USD/CAD currency pair sold off this week after its short-term rally following the upside breakout from a descending broadening wedge pattern last week. The simple moving averages (SMAs) are arranged in a bearish manner, as the 20-day SMA is below the 50-day SMA. The overall bias remains bearish, however the USD/CAD could find support at 1.2690 again and bounce towards 1.2955. If this occurs it is likely the pair could move sideways in a consolidation range. If the pair breaks out below 1.2690, then its next support level would be 1.2530. If the pair breaks out above 1.2955, then the pair could rally towards 1.3120.
Source: GAIN Capital, TradingView
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