USD/CAD Tests Resistance At 1.2525 As WTI Oil Slips Below The $100 Level

Key Insights

• The U.S. dollar is moving higher after the release of strong economic reports. 
• WTI oil pulled back below the $100 level, which was bearish for the Canadian currency. 
• A move above 1.2525 will push USD/CAD towards the resistance at 1.2550.

U.S. Dollar Gains Ground Against Canadian Dollar

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

The U.S. Dollar Index is currently stuck in the 98.50 – 98.70 range. If the U.S. Dollar Index settles above 98.70, it will move towards the resistance at the 99 level, which will be bullish for USD/CAD.

Today, the U.S. released Non Farm Payrolls report, which indicated that the economy added 431,000 jobs in March, compared to analyst consensus of 490,000. Unemployment Rate declined from 3.8% in February to 3.6% in March, while analysts expected that it would decline to 3.7%.

Foreign exchange market traders also had a chance to take a look at the final reading of Manufacturing PMI report for March. The report indicated that Manufacturing PMI increased from 57.3 in February to 58.8 in March, compared to analyst consensus of 58.5. In Canada, Manufacturing PMI grew from 56.6 to 58.9, compared to analyst forecast of 56.

It should be noted that WTI oil moved below the $100 level, which put additional pressure on commodity-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD is testing the resistance level at 1.2525. If this test is successful, USD to CAD will move towards the next resistance at 1.2550. RSI is in the moderate territory, and there is plenty of room to gain upside momentum in case the right catalysts emerge.

If USD to CAD settles above 1.2550, it will head towards the 20 EMA at 1.2580. A move above this level will lead to the test of the next resistance at 1.2590.

On the support side, the nearest support level for USD to CAD is located at 1.2500. If USD to CAD settles back below this level, it will head towards the next support at 1.2470.

A move below the support at 1.2470 will open the way to the test of the support at 1.2450. In case USD to CAD declines below this level, it will head towards the next support at 1.2425.

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