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USD/CAD Remains Stuck In A Tight Range

By:
Vladimir Zernov
Published: Feb 9, 2022, 17:42 UTC

USD/CAD continues to trade between the 50 EMA and the resistance at 1.2710.

USD/CAD

In this article:

Canadian Dollar Moves Higher Against U.S. Dollar

USD/CAD is currently testing the support level at the 20 EMA at 1.2680 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index continues its attempts to settle below the support level at 95.40. A move below this level will push the U.S. Dollar Index towards the next support at 95.20 which will be bearish for USD/CAD.

Today, foreign exchange market traders focused on the dynamics of U.S. government bond markets as Treasury yields pulled back after the recent rally, which was bearish for the U.S. dollar.

Most likely, trading will remain choppy until Thursday when the U.S. will release the ultra-important inflation data which may show that U.S. Inflation Rate reached a multi-decade high at 7.3%.

Inflation numbers will look ugly, but it is unclear whether inflation reports will exceed analyst expectations and boost outlook for aggressive rate hikes. This scenario will be bullish for the U.S. dollar, but any scenario which provides Fed with an opportunity to raise rates at a measured pace may put more pressure on the American currency.

Technical Analysis

usd cad february 9 2022

USD to CAD failed to settle above the resistance at 1.2710 and pulled back towards the support level at 1.2680. The 50 EMA is located in the nearby, so USD to CAD may get significant support in the 1.2670 – 1.2680 range.

If USD to CAD declines below the 50 EMA, it will head towards the next support level at 1.2650. A move below 1.2650 will push USD to CAD towards the support at 1.2625. In case USD to CAD manages to settle below this level, it will head towards the next support at 1.2590.

On the upside, USD to CAD needs to get above 1.2710 to have a chance to gain upside momentum in the near term. The next resistance level for USD to CAD is located at 1.2730. If USD to CAD gets above 1.2730, it will head towards the resistance at 1.2760.

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

About the Author

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.

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