USD/CAD Tests Support At 1.2525

Canadian Dollar Is Gaining Some Ground Against U.S. Dollar

USD/CAD  is currently trying to settle below 1.2525 while U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index managed to get above the resistance at 95.20 and is moving towards the next resistance at 95.40. A move above 95.40 will open the way to the test of the 50 EMA at 95.55 which will be bullish for USD/CAD.

Today, Canada reported that Manufacturing Sales increased by 2.6% month-over-month in November compared to analyst cosnensus which called for growth of 3.1%.

Foreign exchange market traders also focused on the dynamics of commodity markets. WTI oil made an attempt to get to the test of the psychologically important $85 level but lost momentum and pulled back below the $84 level.

In case WTI oil manages to settle back above $84, it will have a good chance to test the $85 level which will be bullish for commodity-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD is currently trying to settle below the support level at 1.2525. In case this attempt is successful, USD to CAD will get to another test of the next support level which is located at 1.2500. This support level has been recently tested and proved its strength.

A move below the support at 1.2500 will push USD to CAD towards the support level at 1.2475. If USD to CAD gets below this level, it will move towards the next support at 1.2460. A successful test of the support at 1.2460 will open the way to the test of the next support level which is located at 1.2425.

On the upside, USD to CAD needs to settle above 1.2525 to have a chance to gain upside momentum in the near term. The next resistance level for USD to CAD is located at 1.2550. If USD to CAD manages to settle above 1.2550, it will gain additional upside momentum and head towards the next resistance at 1.2590.

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