FX.co ★ Technical Analysis of USD/CAD for Januaryr 22, 2015

Impact on USD

The US building permits fell in December. The US commerce department said that the building permits decreased to 1032 thousand in December 2014 from 1052 thousand in November 2014. The other data, housing starts, rose 4.4% in December. The housing starts rose to a rate of 728,000, the highest level since March 2008. Today, the focus has shifted to unemployment claims.

Impact on CAD

BOC surprises with an interest rate cut. Today, the Bank of Canada announced that it is lowering its target for the overnight rate by one-quarter of one percentage point to 3/4 per cent. The BOC has to deal with with lower interest rates because global crude oil prices have fallen by more than 40 percent since the October and by more than 55 percent since their recent peak in June 2014.

Technical view:

The pair extends its rally towards 1.2394. The pair managed to breach above 200Msma and it is trading above it. In case, if the pair manages to close above 200Msma 1.2325, it can extend its rally towards 1.2500 and 1.2700. The pair gained almost 500 pips in 2 sessions. We have been recommending buying on every dip for the long-term perspective. The pair has intraday support at 1.2325. The intraweek support exists between 1.2167 and 1.2021. As long as the pair trades above 1.2000, use every dip to buy.