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  • USD/CAD is having a difficult time setting a short-term direction.
  • US Dollar Index stays in the negative territory below 96.50.
  • Falling crude oil prices weigh on commodity-related loonie.

The USD/CAD pair is trading in a tight range on Thursday in the absence of significant fundamental drivers. As of writing, the pair was virtually unchanged on a daily basis at 1.3508.

DXY starts to push lower

Earlier in the session, the data published by the US Department of Labor showed that the weekly Initial Jobless Claims edged lower from 1.41 million to 1.31 million in the week ending July 4th. With this reading providing a modest boost to risk sentiment, the US Dollar Index (DXY), which spent the majority of the day near 96.50, lost its traction and was last seen down 0.1% on the day at 96.38.

On the other hand, a renewed selling pressure surrounding crude oil prices didn’t allow the commodity-sensitive CAD to capitalize on the USD weakness. At the moment, the barrel of West Texas Intermediate was losing 0.9% on the day at $40.50.

Meanwhile, the only data from Canada revealed that Housing Starts in June rose to 211.7K on a yearly basis in June and surpassed the market expectation of 198K. Nevertheless, this reading had no impact on the CAD’s performance. 

On Friday, Statistics Canada will reveal the labour market report. Markets expect the Unemployment Rate to retreat to 12% from 13.7% in May. A better-than-expected reading could help the CAD end the week on a strong note against its rivals.

Technical levels to watch for