The USD/CAD pair remains steady after registering gains for the last two successive days, trading near 1.4220 during early European hours on Thursday. Technical analysis on the daily chart indicates that the pair has broken above the falling wedge pattern, a bullish formation signaling a potential upward move.

However, the 14-day Relative Strength Index (RSI) remains below the 50 level, indicating a prevailing bearish outlook. A decisive move would be needed to confirm a clear directional trend. Additionally, the USD/CAD pair continues to trade below the nine- and 14-day Exponential Moving Averages (EMAs), reflecting persistent bearish sentiment and weak short-term price action.

The USD/CAD pair faces immediate resistance at the nine-day EMA of 1.4236, followed by the 14-day EMA of 1.4262. A decisive break above these levels could strengthen short-term momentum, potentially pushing the pair toward the psychological level of 1.4300.

On the downside, a return to the falling wedge would reinforce the bearish bias, pushing the USD/CAD pair toward the psychological level of 1.4100, followed by the lower boundary of the wedge at 1.4080. A break below this channel would further strengthen the bearish outlook, potentially driving the pair toward the three-month low of 1.3927, last reached on November 25.

USD/CAD: Daily Chart

Source: FXSTREET

Here is what you need to know on Thursday, February 20:

While major currency pairs are having a tough time making a decisive move in either direction, Gold extends its uptrend to a new record-high on Thursday. The US economic calendar will feature the weekly Initial Jobless Claims report and the European Commission will publish the preliminary Consumer Confidence Index data for February. Later in the American session, several Federal Reserve (Fed) policymakers will be delivering speeches.

US Dollar PRICE This week

The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the weakest against the Japanese Yen.

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

The minutes of the Fed's January policy meeting showed on Wednesday that officials debated whether it might be wise to slow or even pause the reduction of their balance sheet holdings, given that renewed concerns over the federal debt ceiling have come back into play. Meanwhile, US President Donald Trump noted that it could be possible to make a new trade deal with China. These comments failed to trigger a noticeable market reaction and Wall Street's main indexes ended the day marginally higher. Early Thursday, US stock index futures trade in negative territory and the US Dollar Index holds steady near 107.00 after posting small gains for two consecutive days.

The data from Australia showed early Thursday that the Unemployment Rate edged higher to 4.1% in January from 4% in December, as expected. In this period, Full-Time Employment rose by 54.1K after declining by 23.7K in December. In the meantime, the People’s Bank of China (PBoC), China's central bank, announced that it left the one-year and five-year Loan Prime Rates (LPRs) unchanged at 3.10% and 3.60%, respectively. AUD/USD edged slightly higher in the Asian trading hours and was last seen trading above 0.6360.

EUR/USD failed to gather recovery momentum and closed in the negative territory for the third consecutive day on Wednesday. The pair trades in a tight range below 1.0450 in the European morning on Thursday.

Although stronger-than-expected inflation data from the UK helped Pound Sterling stay resilient against its rivals in the early European session on Wednesday, GBP/USD lost its traction and closed the day marginally lower. The pair holds its ground to begin the European session and trades near 1.2600.

Growing expectations for a hawkish Bank of Japan (BoJ) policy outlook continue to support the Japanese Yen (JPY). Earlier in the day, Japan's 10-year government bond yield touched its highest level in 15 years. At the time of press, USD/JPY was trading at its lowest level since early December near 150.00, losing about 1% on the day.

Following Thursday's choppy action, Gold resumed its uptrend early Thursday and touched a fresh record high near $2,950.

Source: FXSTREET

EUR/JPY tumbles to nearly 156.55 in Thursday’s European session, down 0.85% on the day.  

Hawkish BoJ expectations boost the JPY.

Investors will take more cues from the German January PPI, which is due later on Thursday. 

The EUR/JPY cross extends its downside to around 156.55 during the early European session on Thursday. The Japanese Yen (JPY) strengthens amid rising bets for additional Bank of Japan (BoJ) rate hikes. The German Producer Price Index (PPI) for January is due later on Thursday. 

Japan's latest data has reinforced the BoJ's case for raising interest rates, with GDP surpassing expectations and nominal wages rising at the fastest pace in nearly three decades. According to a Reuters poll, over 65% of economists said that the BoJ could hike to 0.75% in the third quarter and the rate of pay increases in this year's labor talks are seen as 5.00% vs. 4.75% in the January poll. 

BOJ Board Member Hajime Takata said on Wednesday that it’s important to continue considering gradual rate hikes, while also noting that Japan’s bond yields are moving in accordance with the market’s view of the economy. The growing speculation the BoJ will hike rates sooner rather than later lifts the JPY and creates a headwind for EUR/JPY. 

On the Euro front, tariff concerns from US President Donald Trump could weigh on the shared currency. Late Tuesday, Trump said that he would likely impose tariffs of around 25% on foreign cars, while semiconductor chips and drugs are set to face higher duties. Trump didn’t provide a clear timeline for when these tariffs will come into effect but said that some of them will be enacted by April 2.

Additionally, the monetary policy divergence between the BoJ and the European Central Bank (ECB) also weighs on the Euro. "Markets imply another 75bps of ECB cuts in the next 12 months, which would see the policy rate bottom at 2.00%,” noted BBH's FX analysts. 

Source: FXSTREET

Gold prices rose to a record high on Thursday as investors turned to bullion for safety on fears US President Donald Trump's tariff plans would stoke inflation and a global trade war.

Spot gold was up 0.5% at US$2,945.83 an ounce, as of 0621 GMT, after hitting a record high of US$2,947.11 earlier in the session.

Bullion has risen 12% so far this year and hit a fresh peak for the tenth time on Trump tariff fears.

US gold futures GCcv1 gained 0.9% to US$2,963.80 on Thursday.

"Uncertain outlooks for both global trade and inflation are proving to be conducive for gold and are acting to bring the US$3,000 level within range," said Tim Waterer, chief market analyst at KCM Trade.

Since his inauguration, Trump has imposed a 10% tariff on Chinese imports and a 25% tariff on steel and aluminium. He said on Wednesday he would announce tariffs related to lumber, cars, semiconductors and pharmaceuticals "over the next month or sooner."

Minutes of the Federal Reserve's last policy meeting showed on Wednesday that Trump's initial policy proposals raised concerns about higher inflation and affirmed a continued pause on rate cuts.

Despite chances of fewer rate cuts this year, market participants maintain their overall bullish outlook for gold.

"Gold has and should continue to benefit from robust physical market demand, underpinned by resilient central bank purchases and as physical gold ETFs transition from sellers to marginal buyers," said Trevor Yates, analyst at Global X.

Gold is seen as a hedge against geopolitical risks and inflation, but higher interest rates dampen the non-yielding asset's appeal.

"If we look at potential risks which could slow gold prices down, safe-haven demand could dry up somewhat if a peace deal moves closer to fruition between Russia and Ukraine," Waterer said.

Trump denounced Ukrainian President Volodymyr Zelenskiy as a "dictator" on Wednesday and warned he had to move quickly to secure peace or risk losing his country.

Spot silver firmed 0.5% to US$32.88 an ounce. Platinum gained 0.4% to US$976, while palladium rose 0.6% to US$973.87.

Source: Theedgemarkets