USD/CAD Is Losing Ground In A Volatile Session

Key Insights

• In the absence of economic reports, traders focus on general market sentiment
• Canadian dollar moves higher as oil stays strong amid geopolitical tensions
• From a big picture point of view, USD/CAD remains stuck in a wide range

Canadian Dollar Gains Ground Against U.S. Dollar

USD/CAD is currently trying to settle below the 20 EMA at 1.2720 while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index is moving towards the resistance level at 96.25. If the U.S. Dollar Index manages to settle above this level, it will head towards the next resistance at 96.50, which will be bullish for USD/CAD.

Today, foreign exchange market traders will focus on general market sentiment and the dynamics of commodity markets. WTI oil has recently made an attempt to settle above $93.50, but lost momentum and declined below the $92 level, which was bearish for the Canadian dollar.

Meanwhile, the yield of 10-year Treasuries tested the 2.00% level as traders shrugged off geopolitical fears and focused on inflation. If the yield of 10-year Treasuries manages to settle above the psychologically important 2.00% level, it will gain additional upside momentum and move towards the recent highs near 2.06%, which will be bullish for the American currency.

Technical Analysis

USD to CAD is testing the support level at the 20 EMA at 1.2720. If USD to CAD settles below this level, it will head towards the next support level, which is located at the 50 EMA at 1.2695.

In case USD to CAD declines below the support at the 50 EMA, it will move towards the next support at 1.2680. A successful test of this level will open the way to the test of the support at 1.2650.

On the upside, the nearest resistance level for USD to CAD is located at 1.2730. In case USD to CAD gets above this level, it will head towards the next resistance level at 1.2760. A move above the resistance at 1.2760 will push USD to CAD towards the resistance at 1.2780.

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