USD/CAD Gains Ground As WTI Oil Moves Below The $90 Level

Canadian Dollar Pulls Back Against U.S. Dollar

USD/CAD is currently trying to settle back above the resistance at 1.2710 while U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index has already made several attempts to get above the 50 EMA at 95.75 but failed to develop sufficient upside momentum and pulled back towards 95.60. A move below this level will open the way to the test of the support at 95.40 which will be bearish for USD/CAD.

Today, foreign exchange market traders focused on the dynamics of commodity markets. WTI oil managed to settle below the psychologically important $90 level and gained strong downside momentum. Currently, it is trying to settle below the $89 level. A move below this level will push WTI oil towards the support level at $87.90 which will be bearish for commodity-related currencies, including Canadian dollar.

Traders also continued to monitor the developments in U.S. government bond markets. The yield of 10-year Treasuries managed to get above the 1.95% level and is moving towards the important 2.00% level. In case the yield of 10-year Treasuries gets to the test of this level, U.S. dollar may get more support.

Technical Analysis

USD to CAD is testing the resistance level at 1.2710. In case USD to CAD manages to settle above this level, it will move towards the resistance at 1.2730.

A move above 1.2730 will push USD to CAD towards the next resistance level which is located at 1.2760. If USD to CAD climbs above this level, it will head towards the resistance at 1.2780. A successful test of this level will push USD to CAD towards 1.2800.

On the support side, the nearest support level for USD to CAD is located at the 20 EMA at 1.2680. The 50 EMA is located in the nearby, so USD to CAD may get material support in this area.

A move below the 50 EMA will push USD to CAD towards the support level at 1.2650. In case USD to CAD declines below 1.2650, it will move towards the support at 1.2625.

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