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Vladimir Zernov
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USD/CAD Video 12.02.21.

U.S. Dollar Lost Upside Momentum After The Release Of Consumer Confidence Report

USD/CAD is currently trying to settle below the support at 1.2700 while the U.S. dollar is mostly flat against a broad basket of currencies.

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The U.S. Dollar Index has recently made an attempt to settle above the resistance at the 20 EMA at 90.65 but failed to develop sufficient upside momentum and pulled back. Currently, the U.S. Dollar Index is trying to settle below the nearest support level at 90.50. If this attempt is successful, the U.S. Dollar Index will head towards the support at 90.30 which will be bearish for USD/CAD.

Today, the U.S. provided Consumer Confidence report for February which showed that Consumer Confidence declined from 79 in January to 76.2 in February. Analysts expected that Consumer Confidence would grow to 80.8 so the report was much worse than expected.

The disappointing report put material pressure on the American currency. Meanwhile, Canadian dollar and other commodity-related currencies received additional support as WTI oil gained upside momentum despite OPEC’s decision to cut its oil demand forecast for 2021. Currently, WTI oil is trying to settle above the $59 level. If WTI oil gets to the test of the psychologically important $60 level, Canadian dollar will get a boost.

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Technical Analysis

USD to CAD failed to settle above the resistance at the 20 EMA at 1.2745 and gained downside momentum. Currently, USD to CAD is testing the nearest support level at 1.2700.

If USD to CAD manages to settle below this level, it will head towards the next support level at 1.2665. In case USD to CAD gets below the support at 1.2665, it will head towards the support at 1.2625. A move below this level will push USD to CAD towards the yearly lows at 1.2590.

On the upside, the nearest resistance level for USD to CAD is located at the 20 EMA at 1.2745. The recent trading action indicated that the resistance level at 1.2720 is no longer relevant as USD to CAD easily moved back and forth through this level. If USD to CAD manages to settle above the 20 EMA, it will head towards the next resistance at 1.2775.

For a look at all of today’s economic events, check out our economic calendar.

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