USD/CAD Tests Resistance At 1.2550

U.S. Dollar Rebounds Against Canadian Dollar

USD/CAD is currently trying to settle back above the resistance at 1.2550 while U.S. dollar rebounds against a broad basket of currencies.

The U.S. Dollar Index has recently managed to settle above the 95 level and is moving towards the resistance at 95.20. In case the U.S. Dollar Index manages to settle above this level, it will head towards the next resistance at 95.40 which will be bullish for USD/CAD.

Today, foreign exchange market traders focused on the economic data from U.S. Retail Sales declined by 1.9% month-over-month in December while analysts expected that they would remain unchanged. On a year-over-year basis, Retail Sales increased by 16.9%.

U.S. Industrial Production declined by 0.1% month-over-month in December compared to analyst consensus which called for growth of 0.3%. Manufacturing Production decreased by 0.3% month-over-month compared to analyst consensus which called for growth of 0.5%.

Traders also had a chance to take a look at the preliminary Michigan Consumer Sentiment report for January. The report indicated that Consumer Sentiment declined from 70.6 in December to 68.8 in December compared to analyst consensus of 70, and it looks that the fast spread of Omicron has already put pressure on consumers’ mood.

Technical Analysis

USD to CAD is currently testing the resistance level at 1.2550. In case this test is successful, USD to CAD will move towards the next resistance at 1.2590.

A move above the resistance level at 1.2590 will open the way to the test of the resistance at 1.2625. If USD to CAD manages to settle above this level, it will head towards the next resistance which is located at 1.2650.

On the support side, a move below 1.2550 will push USD to CAD back towards the support level at 1.2530. If USD to CAD declines below 1.2530, it will head towards the support at 1.2500. A successful test of the support at 1.2500 will push USD to CAD towards the support at 1.2475.

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