USD/CAD Is Losing Ground At The Start Of The Week

Key Insights

• WTI oil moved back above the $100 level, which was bullish for the Canadian dollar. 
• Treasury yields pulled back from recent highs, but this move did not put much pressure on the American currency. 
• A move below 1.2470 will push USD/CAD towards the support level at 1.2450.

U.S. Dollar Is Losing Ground Against Canadian Dollar

USD/CAD is currently trying to settle below the support at 1.2470, while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index is moving towards the resistance at the 99 level. If the U.S. Dollar Index gets above this level, it will head towards the next resistance at 99.20, which will be bullish for USD/CAD.

Today, foreign exchange market traders had a chance to take a look at the Factory Orders report from the U.S. The report indicated that Factory Orders declined by 0.5% month-over-month in February, in line with the analyst consensus.

Traders also focused on the developments in U.S. government bond markets. The yield of 2-year Treasuries faced resistance near the 2.50% level and declined to the 2.44% level, but this move did not put any material pressure on the U.S. dollar.

Meanwhile, WTI oil moved back above the $100 level and is currently trying to settle above $103. A successful test of this level will open the way to the test of the $105 level, which will be bearish for commodity-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD is testing the support level at 1.2470. If this test is successful, USD to CAD will head towards the next support level at 1.2450.

A successful test of the support at 1.2450 will push USD to CAD towards the next support at 1.2425. In case USD to CAD settles below this level, it will head towards the next support level at 1.2400.

On the upside, the nearest resistance level for USD to CAD is located at 1.2500. In case USD to CAD gets back above this level, it will head towards the resistance level at 1.2530.

A move above the resistance at 1.2530 will push USD to CAD towards the resistance at 1.2550. If USD to CAD settles above this level, it will head towards the resistance at the 20 EMA, which is located at 1.2565.

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