USD/CAD Gains Some Ground Ahead Of The Weekend

Key Insights

• U.S. dollar stays strong amid high demand for safe-haven assets. 
• U.S. Non Farm Payrolls report exceeded analyst expectations and provided additional support to the American currency.
• A move back above 1.2750 will push USD/CAD towards the resistance at 1.2780.

U.S. Dollar Moves Higher Against Canadian Dollar

USD/CAD tested the resistance at 1.2780 but lost momentum and pulled back, while the U.S. dollar moved higher against a broad basket of currencies.

The U.S. Dollar Index rallied today as demand for safe-haven assets remained strong. Currently, the U.S. Dollar Index continues its attempts to settle above the resistance at 98.70. If the U.S. Dollar Index settles above this level, it will move towards the resistance at 99, which will be bullish for USD/CAD.

Today, the U.S. released Non Farm Payrolls report, which indicated that the U.S. economy created 678,000 jobs in January, compared to analyst consensus of 400,000. Unemployment Rate declined from 4% in January to 3.8% in February.

Foreign exchange market traders also remained focused on general the market sentiment, which turned negative after the second round of negotiations between Russia and Ukraine yielded little results. Not surprisingly, the rush to safe-haven assets ahead of the unpredictable weekend provided significant support to the U.S. dollar.

Technical Analysis

USD to CAD has recently declined below 1.2750 and continues to pull back from recent highs. The nearest support level for USD to CAD is located at the 20 EMA at 1.2715.

In case USD to CAD manages to settle below the 20 EMA at 1.2715, it will head towards the next support at the 50 EMA at 1.2700. A move below this support level will push USD to CAD back to the support at 1.2680.

On the upside, the nearest resistance for USD to CAD is located at 1.2750. In case USD to CAD manages to settle back above this level, it will head towards the next resistance at 1.2780. A successful test of the resistance at 1.2780 will open the way to the test of the next resistance level, which is located at 1.2800.

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