USD/CAD Retreats At The Start Of The Week

Canadian Dollar Gains Ground Against U.S. Dollar

USD/CAD is currently trying to settle below the support at 1.2680 while U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index is currently stuck near the 95.50 level. The nearest resistance level for the U.S. Dollar Index is located near the 50 EMA at 95.75. In case the U.S. Dollar Index gets to the test of the 50 EMA, USD/CAD will get more support.

There are no important economic reports scheduled to be released in the U.S. and Canada today, so foreign exchange market traders will focus on the dynamics of commodity markets and the trajectory of U.S. Treasury yields.

WTI oil pulled back towards the $91 level after an unsuccessful attempt to settle above $93. In case WTI oil manages to settle back below $91, it will head towards the psychologically important $90 level which will be bearish for commodity-related currencies, including Canadian dollar.

The yield of 2-year Treasuries has pulled back towards the 1.30% level while the yield of 10-year Treasuries continued to move towards 1.95%. The 2.00% level is in sight, and a move towards this level will provide more support to the American currency.

Technical Analysis

USD to CAD is trying to get below the support area between the 50 EMA at 1.2670 and the 20 EMA at 1.2680. In case USD to CAD declines below the 50 EMA, it will head towards the next support level which is located at 1.2650.

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

On the upside, the nearest resistance level for USD to CAD is located at 1.2710. In case USD to CAD gets above this level, it will head towards the next resistance at 1.2730. A successful test of the resistance at 1.2730 will open the way to the test of the resistance at 1.2760.

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