It’s a day of dispersion in the global FX market, with European currencies rising against the greenback and commodity dollars losing ground versus the world’s reserve currency.
The day’s only noteworthy economic release, the NAHB Housing Market Index, was a big disappointment, falling to a two-year low on its biggest one-month decline in four years on rising interest rates and worries about the impact of tariffs. While that was enough to drive the buck lower against European currencies and the yen, the commodity dollars were yet weaker on the general risk-off tone to global markets.
With the Thanksgiving holiday this Thursday, trading in the North American session is likely to be slow in the latter half of the week. Meanwhile, it should be a relatively quiet week for economic data, with only Canada’s dual release of CPI and Retail Sales likely to draw FX traders’ attention. Both measures are expected to fall for the second straight month, with the big drop in oil prices draining some momentum from the country’s recent economic momentum.
Technically speaking, USD/CAD is bouncing back off its recent bullish trend line so far this week. The pair has consistently put in higher highs and higher lows since bottoming near 1.2800 in early October, and for now, there’s no reason to fight against that trend. Looking ahead, last week’s high near 1.3260 and the July peak at 1.3290 are the next resistance levels to watch, followed by the 17-month high near 1.3385. A close below last week’s low at 1.3127 would break the near-term uptrend and flip the pair’s technical bias back to neutral for now.
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