USD/CAD Tests Support At 1.2625
Canadian Dollar Gains Some Ground Against U.S. Dollar
USD/CAD is currently trying to settle below the support at 1.2625 while U.S. dollar is moving higher against a broad basket of currencies.
The U.S. Dollar Index is stuck in the range between the support at 96 and the resistance at 96.25. In case the U.S. Dollar Index moves below the 96 level, it will head towards the 20 EMA at 95.75 which will be bearish for USD/CAD.
Today, foreign exchange market traders focused on the economic data from U.S. Case-Shiller Home Price Index report indicated that home prices increased by 1% month-over-month in November compared to analyst consensus which called for growth of 0.7%. CB Consumer Confidence declined from 115.2 in December to 113.8 in January compared to analyst consensus of 111.8.
Traders also monitored the developments in commodity markets. WTI oil gained upside momentum and managed to get back above the $85 level. In case WTI oil settles above $85, it will move towards the $86 level which will be bullish for commodity-related currencies, including Canadian dollar.
USD to CAD declined below the 50 EMA at 1.2650 and is trying to settle below the next support level which is located at 1.2625. In case this attempt is successful, USD to CAD will head towards the support at the 20 EMA at 1.2605.
A move below the support at the 20 EMA will open the way to the test of the support at 1.2590. If USD to CAD manages to get below this level, it will head towards the support level at 1.2550.
On the upside, the nearest resistance is located at the 50 EMA. If USD to CAD manages to settle above 1.2650, it will move back towards the resistance level at 1.2680. RSI is in the moderate territory, and there is enough room to gain upside momentum in case the right catalysts emerge. A successful test of this level will push USD to CAD towards the resistance which is located near the recent highs at 1.2710.
For a look at all of today’s economic events, check out our economic calendar.