• Today’s mixed US housing market data fails to interrupt the ongoing USD rally.
• The pair, however, fails to gain any traction and remains confined in a range.
The USD/CAD pair maintained its offered tone through the early NA session and is currently placed at the lower end of its daily trading range post data.
The pair extended its range-bound price action, with a mild negative bias around mid-1.2800s, and had a rather muted reaction to the Statistics Canada’s latest report that showed Canadian manufacturing sales increased more than expected by 1.4% in March.
Meanwhile, the strong bid tone surrounding the US Dollar seemed unaffected by today’s mixed US housing market data, showing a steep m-o-m decline of 3.7% in housing starts during April. The negative reading, to a larger extent, was negated by a lower than expected drop in building permits.
Meanwhile, hawkish comments by Atlanta President Raphael Bostic, saying that we raised 2018 GDP forecast to 2.4%-2.5%, provided a minor boost to the US Dollar. This coupled with a modest retracement in crude oil prices kept undermining the commodity-linked currency – Loonie and further collaborated towards limiting any sharp declines.
Traders now look forward to EIA’s weekly US crude oil inventories data, which could have a significant impact on oil prices and eventually provide some meaningful trading opportunities.
Technical levels to watch
Immediate support is pegged near the 1.2830 region (50-DMA), below which the pair is likely to accelerate the slide back towards the 1.2800 handle en-route 1.2770-65 horizontal support.
On the upside, the 1.2875 level might continue to act as an immediate hurdle and is closely followed by resistance near the 1.2900 handle, above which the pair is likely to head towards testing the 1.2940-45 supply zone.