USD/CAD Tests Resistance At 1.2710

Canadian Dollar Is Losing Ground Against U.S. Dollar

USD/CAD is currently trying to settle above the resistance at 1.2710 while U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index managed to settle above the 97 level and is testing the resistance at 97.25. A successful test of this level will open the way to the test of the resistance at 97.45 which will be bullish for USD/CAD.

Today, foreign exchange market traders focused on economic data from U.S. Fourth-quarter GDP Growth Rate report indicated that GDP increased by 6.9% quarter-over-quarter compared to analyst consensus which called for growth of 5.5%. This report provided significant support to the American currency.

Initial Jobless Claims report showed that 260,000 Americans filed for unemployment benefits in a week, in line with the analyst consensus. Continuing Jobless Claims increased from 1.62 million (revised from 1.64 million) to 1.68 million compared to analyst consensus of 1.65 million.

Durable Goods Orders declined by 0.9% month-over-month in December while analysts expected that they would decrease by 0.5%. Pending Home Sales declined by 3.8% month-over-month in December compared to analyst consensus of -0.2%.

Technical Analysis

USD to CAD is testing the resistance level at 1.2710. In case this test is successful, USD to CAD will move towards the next resistance which is located at 1.2730. RSI remains in the moderate territory, and there is plenty of room to gain additional momentum in case the right catalysts emerge.

If USD to CAD gets above the resistance at 1.2730, it will head towards the next resistance level at 1.2760. A move above this level will push USD to CAD towards the resistance at 1.2780. In case USD to CAD manages to settle above this level, it will head towards the resistance at 1.2800.

On the support side, the previous resistance at 1.2680 will serve as the first support level for USD to CAD. In case USD to CAD declines below this level, it will head towards the support at the 50 EMA at 1.2650. A successful test of this support level will push USD to CAD towards the support at 1.2625.

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