USD/CAD Tests Resistance At 1.2525

Key Insights

• Traders rush out of safe-haven assets as Russia – Ukraine negotiations yield positive results. 
• Meanwhile, the pullback in the oil markets puts some pressure on the Canadian dollar. 
• A move above the resistance at 1.2525 will push USD/CAD towards the resistance at 1.2550.

U.S. Dollar Is Mostly Flat Against Canadian Dollar

USD/CAD is currently trying to settle back above the resistance at 1.2525, while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has managed to settle below the support at 98.35 and made an attempt to settle below the next support at the 98 level. In case the U.S. Dollar Index declines below this level, it will head towards the support at 97.75, which will be bearish for USD/CAD.

Today, foreign exchange market traders had a chance to take a look at the Case-Shiller Home Price Index report for January. The report indicated that home prices increased by 1.4% month-over-month. On a year-over-year basis, home prices grew by 19.1%.

The progress in Russia – Ukraine negotiations had a negative impact on safe-haven assets, which was bearish for the American currency. Meanwhile, WTI oil  found itself under pressure on hopes that geopolitical tensions would decrease. As a result, the Canadian dollar failed to gain ground against the U.S. dollar.

Technical Analysis

USD to CAD is testing the resistance level at 1.2525. In case this test is successful, USD to CAD will move towards the next resistance at 1.2550.

A move above the resistance level at 1.2550 will open the way to the test of the resistance at 1.2590. In case USD to CAD climbs above this level, it will head towards the next resistance, which is located at the 20 EMA at 1.2610.

On the support side, the nearest support level for USD to CAD is located at 1.2500. RSI is in the moderate territory, and there is plenty of room to gain downside momentum in case the right catalysts emerge.

If USD to CAD settles below 1.2500, it will head towards the support level at 1.2470. A move below 1.2470 will push USD to CAD towards the support at 1.2450.

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