USD/CAD Tests Resistance At 1.2850

U.S. Dollar Rallies Against Canadian Dollar

USD/CAD is currently trying to settle above the resistance level at 1.2850, while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to settle above the resistance at 97.45, but lost momentum and pulled back closer to the support level at 97.25. In case the U.S. Dollar Index declines below this level, it will move towards the next support at 97, which will be bearish for USD/CAD.

Today, U.S. released the second estimate of the fourth-quarter GDP Growth Rate report, which indicated that GDP increased by 7%, in line with the analyst consensus. Initial Jobless Claims report indicated that 232,000 Americans filed for unemployment benefits in a week, compared to analyst consensus of 235,000. New Home Sales declined by 4.5% month-over-month in January, while analysts expected that they would decline by 8.6%.

While the reports were interesting, foreign market traders focused on the war in Ukraine, which triggered a flight to safety. In case the escalation of the conflict continues, the U.S. dollar may get more support.

Technical Analysis

USD to CAD is testing the resistance level at 1.2850. In case this test is successful, USD to CAD will move towards the next resistance, which is located at 1.2890.

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 settles above 1.2890, it will head towards the resistance at 1.2915.

On the support side, the nearest support level for USD to CAD is located at 1.2830. A move below this level will push USD to CAD towards the support at 1.2800. If USD to CAD gets below 1.2800, it will head back towards the support at 1.2780. In case USD to CAD declines below this level, it will continue its pullback and get to the test of the next support level at 1.2760.

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