USD/CAD Stabilizes After An Unsuccessful Attempt To Settle Below 1.2600

Key Insights

• Canada reported strong job growth in February. 
• In the U.S., Existing Home Sales declined by 7.2% month-over-month in February.
• A move above 1.2625 will push USD/CAD towards the resistance at 1.2650.

Canadian Dollar Is Gaining Some Ground Against U.S. Dollar

USD/CAD is currently trying to settle back above the resistance at 1.2625, while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to settle above the resistance at 98.35 but lost momentum and moved back into the 98 – 98.35 range. In case the U.S. Dollar Index declines below the 98 level, it will get to the test of the 20 EMA at 97.90, which will be bearish for USD/CAD.

Today, Canada reported that Retail Sales increased by 3.2% month-over-month in January, compared to analyst consensus which called for growth of 2.4%. on a year-over-year basis, Retail Sales increased by 12%.

Canada’s ADP Employment Change report indicated that employment increased by 475,000 in February, compared to analyst forecast of 120,000.

In the U.S., foreign exchange market traders focused on the Existing Home Sales report which showed that Existing Home Sales declined by 7.2% month-over-month in February.

Technical Analysis

USD to CAD failed to settle below the support at 1.2590 and is trying to get back above 1.2625. In case this attempt is successful, USD to CAD will move towards the resistance at 1.2650.

A move above the resistance at 1.2650 will push USD to CAD towards the resistance level at 1.2680. If USD to CAD manages to settle above this level, it will move towards the next resistance, which is located at the 50 EMA at 1.2715.

On the support side, the nearest support level for USD to CAD is located at 1.2590. In case USD to CAD declines below this level, it will move towards the next support at 1.2560. A successful test of the support at 1.2560 will open the way to the test of the support at 1.2525.

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