USD/CAD Moves Lower After U.S. Inflation Reports Meet Analyst Expectations
- U.S. dollar continues to pull back against Canadian dollar.
- U.S. inflation reports indicate that inflation is at multi-decade highs.
- A move below the support at 1.2780 will push USD/CAD towards the support level at 1.2760.
U.S. Dollar Is Losing Some Ground Against Canadian Dollar
USD/CAD is currently trying to settle below the support at 1.2780, while the U.S. dollar is gaining ground against a broad basket of currencies.
The U.S. Dollar Index settled above the resistance at 98 and is testing the next resistance level at 98.35. If this test is successful, the U.S. Dollar Index will move towards the resistance at 98.70, which will be bullish for USD/CAD.
Today, foreign exchange market traders focused on the inflation data from the U.S. Inflation Rate increased by 0.8% month-over-month in February, in line with the analyst consensus. On a year-over-year basis, Inflation Rate grew by 7.9%. Core Inflation Rate increased by 6.4%.
Traders also had a chance to take a look at the Initial Jobless Claims report, which indicated that 227,000 Americans filed for unemployment benefits in a week compared to analyst consensus of 217,000. Continuing Jobless Claims increased from 1.47 million (revised from 1.48 million) to 1.49 million.
USD to CAD is testing the support level at 1.2780. If USD to CAD settles below this level, it will move towards the next support at 1.2760.
A move below 1.2760 will lead to the test of the next support at the 20 EMA at 1.2750. In case USD to CAD declines below the 20 EMA, it will head towards the support at the 50 EMA, which is located at 1.2720.
On the upside, the nearest resistance level for USD to CAD is located at 1.2800. If USD to CAD manages to settle above this level, it will head towards the next resistance at 1.2830.
A successful test of the resistance at 1.2830 will push USD to CAD towards the resistance at 1.2850. If USD to CAD gets above this level, it will move towards the resistance level at 1.2890.
For a look at all of today’s economic events, check out our economic calendar.