USD/CAD Tests Resistance At 1.2760

U.S. Dollar Gains Some Ground Against Canadian Dollar

USD/CAD is currently trying to settle above the resistance at 1.2760 while U.S. dollar is under pressure against a broad basket of currencies.

The U.S. Dollar Index is testing the support level which is located near the 20 EMA at the 96 level. If this test is successful, the U.S. Dollar Index will move towards the 50 EMA at 95.80 which will be bearish for USD/CAD.

Today, foreign exchange market traders focused on Producer Prices reports from the U.S. The reports indicated that Producer Prices increased by 1% month-over-month in January compared to analyst consensus which called for growth of 0.5%. On a year-over-year basis, Producer Prices grew by 9.7% compared to analyst consensus of 9.1%.

The yield of 10-year Treasuries has recently made another attempt to settle above 2.05%, but this move failed to provide additional support to the American currency as safe-haven assets found themselves under pressure on easing geopolitical tensions.

Meanwhile, WTI oil suffered a strong pullback and made an attempt to settle below the $91 level, which was bearish for commodity-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD is currently testing the resistance level at 1.2760. In case this test is successful, USD to CAD will move towards the next resistance which is located at 1.2780.

If USD to CAD manages to settle above the resistance at 1.2780, it will head towards the resistance level at 1.2800. A successful test of this level will push USD to CAD towards the resistance at 1.2830.

On the support side, the nearest support level for USD to CAD is located at 1.2730. A move below this level will open the way to the test of the support at 1.2710.

In case USD to CAD declines below the support level at 1.2710, it will continue its pullback and head towards the support at the 20 EMA at 1.2700. A successful test of the 20 EMA level will push USD to CAD towards the 50 EMA at 1.2685.

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