USD/CAD Remains Under Pressure

Key Insights

• Canadian dollar moves higher as WTI oil gets closer to the $110 level. 
• U.S. ADP Employment Change report was mostly in line with analyst estimates and did not provide support to the American currency. 
• USD/CAD needs to settle below 1.2470 to continue its downside move. 

Canadian Dollar Gains Ground Against U.S. Dollar

USD/CAD continues its attempts to settle below the support at 1.2470, while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index is testing the support level at 97.75. A move below this level will open the way to the test of the support at the 50 EMA at 97.45, which will be bearish for USD/CAD.

Today, foreign exchange market traders focused on the economic data from the U.S. The ADP Employment Change report indicated that private businesses added 455,000 jobs in March, compared to analyst consensus of 450,000.

The final reading of the fourth-quarter GDP Growth Rate report showed that GDP increased by 6.9% on a quarter-over-quarter basis, while analysts expected that it would grow by 7.1%.

Traders also monitored the developments in commodity markets as WTI oil managed to settle back above the 20 EMA at the $106 level and made an attempt to settle above $108.50. In case WTI oil settles above $108.50, it will move towards the resistance at the $110 level, which will be bullish for commodity-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD is trying to settle below the support level at 1.2470. In case USD to CAD settles below this level, it will get to another test of the next support level, which is located at 1.2450.

A move below the support at 1.2450 will push USD to CAD towards the support at 1.2425. A successful test of this level will open the way to the test of the support at 1.2400.

On the upside, the nearest resistance level for USD to CAD is located at 1.2500. In case USD to CAD climbs back above this level, it will head towards the next resistance level at 1.2525. A move above 1.2525 will push USD to CAD towards the resistance at 1.2550.

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