USD/CAD Gains Ground As Oil Pulls Back From Yearly Highs

Canadian Dollar Is Moving Lower Against U.S. Dollar

USD/CAD is currently trying to settle above 1.2730 while U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get above the resistance at 96.25 and is heading towards the next resistance level at 96.50. In case the U.S. Dollar Index gets to the test of this level, USD/CAD will get more support.

There are no important economic reports scheduled to be released in the U.S. and Canada today, so foreign exchange market traders will focus on the dynamics of U.S. government bond markets and commodity markets.

The yield of 10-year Treasuries has recently moved back above the psychologically important 2.00% level, which was bullish for the American currency. In case yields continue to move higher, U.S. dollar will likely get more support.

Meanwhile, WTI oil made an attempt to get above the $95 level but lost momentum and pulled back below $94. However, the upside momentum remains strong. In case WTI oil manages to settle above $95, it will head towards the key $100 level which will be bullish for commodity-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD is currently trying to stay above 1.2730. In case this attempt is successful, USD to CAD will move towards the next resistance level at 1.2760. RSI is in the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

If USD to CAD climbs back above 1.2760, it will head towards the resistance at the recent highs at 1.2780. A move above this level will open the way to the test of the resistance at 1.2800.

On the support side, a move below 1.2730 will push USD to CAD towards the support at 1.2710. If USD to CAD declines below this level, it will get to the test of the 20 EMA which is located near 1.2700. A move below the 20 EMA will push USD to CAD towards the support at the 50 EMA at 1.2685.

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