(MENAFN- Daily Forex)

• The US dollar traded unevenly against the Canadian dollar amid thin Thanksgiving liquidity, with price action circling major technical levels
• The pair remains supported overall, though shifting Fed expectations and weak crude introduce near-term volatility around key moving averages.

The US dollar has gone back and forth against the Canadian dollar during the trading session on Thursday, which is, of course, no surprise considering that it is Thanksgiving in the United States. This means that almost all of the North American trading volume has disappeared. This is a very North American-centric currency pair. We have seen a bit of a pullback over the last couple of days, but really, at this point in time, I'll be watching closely at the 1.40 level for potential support. After all, it's a large, round, psychologically significant figure and an area that has the 50-day EMA hanging around.

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All things being equal, this is a market that I think, given enough time, we'll find buyers, and we will start to rally towards the upside. I still believe that this pair could go to the 1.4250 level, but recently we've seen a little bit of pushback against US dollar strength as traders are starting to increase bets that the Federal Reserve is going to cut rates a couple of times here in the next few meetings Rate Expectations and Range FormationEURUSD Chart by TradingView

If that does in fact end up being the case, that obviously tightens the interest rate differential here, and then I think you probably have more of a range-bound market, but I think we need to find that range. As things stand right now, and of course, the fact that crude oil is very soft, I still favor the US dollar, but in the short term, I also recognize that there could be a little bit of volatility. If we were to break down below the 200-day EMA at the 1.3918 level, then you start to have conversations about breaking back down. But right now, this looks like it's fairly stable, probably looking for its range for the next couple of weeks.

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