USD/CAD Gains Ground Ahead Of The Weekend

U.S. Dollar Moves Higher Against Canadian Dollar

USD/CAD is currently moving towards the resistance level at 1.2760 while U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index received additional support ahead of the weekend as tensions over Ukraine increased. It has recently managed to get above the 96 level and is trying to gain additional upside momentum. In case this attempt is successful, the U.S. Dollar Index will move towards the resistance at 96.25 which will be bullish for USD/CAD.

Today, Canada reported that Retail Sales declined by 1.8% month-over-month in December compared to analyst consensus which called for a decline of 2.1%. On a year-over-year basis, Retail Sales increased by 8.6%.

In the U.S., foreign exchange market traders focused on the Existing Home Sales report which indicated that Existing Home Sales increased by 6.7% month-over-month in January compared to analyst consensus which called for a decline of 1%.

Increasing geopolitical tensions failed to provide enough support to WTI oil which is currently trading below the $91 level. In case WTI oil manages to settle below the $90 level, it will gain additional downside momentum which will be bearish for commodity-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD settled above the resistance at 1.2730 and is trying to get to the test of the next resistance level at 1.2760. In case USD to CAD moves above this level, it will head towards the next resistance at 1.2780.

A move above the resistance at 1.2780 will open the way to the test of the resistance at 1.2800. If USD to CAD manages to settle above this level, it will head towards the next resistance level at 1.2830.

On the support side, the previous resistance at 1.2730 will serve as the first support level for USD to CAD. If USD to CAD declines below this level, it will move towards the support at the 20 EMA at 1.2705.

In case USD to CAD gets back below the 20 EMA, it will head towards the support at the 50 EMA at 1.2690. A successful test of this level will lead to the test of the next support at 1.2680.

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