USD/CAD Tries To Rebound After Testing Support At 1.2400

Key Insights

• USD/CAD tested multi-week lows. 
• WTI oil pulled back from the $105 level, providing some support to USD/CAD. 
• A move above 1.2450 will push USD/CAD towards the resistance at 1.2470.

U.S. Dollar Remains Under Pressure Against Canadian Dollar

USD/CAD is currently trying to settle back above 1.2450, while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index is testing the resistance level at 99.20. In case this test is successful, the U.S. Dollar Index will move towards the next resistance at 99.45, which will be bullish for USD/CAD.

Today, foreign exchange market traders had a chance to take a look at the final reading of U.S. Services PMI report for March. The report indicated that Services PMI increased from 56.5 in February to 58 in March, compared to analyst consensus of 58.4.

Traders also monitored the developments in commodity markets. WTI oil faced resistance near the $105 level and pulled back closer to $103. In case WTI oil declines below this level, it will move towards the psychologically important $100 level, which will be bearish for commodity-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD received strong support near 1.2400 and is trying to get back above 1.2450. In case USD to CAD manages to settle back above 1.2450, it will move towards the resistance level at 1.2470.

A move above the resistance at 1.2470 will push USD to CAD towards the resistance at 1.2500. In case USD to CAD settles above the resistance at 1.2500, it will head towards the next resistance level at 1.2530.

On the support side, a move below 1.2450 will push USD to CAD towards the support at 1.2425. In case USD to CAD manages to settle below 1.2425, it will move towards the next support level, which is located at 1.2400. A successful test of this level will open the way to the test of the support at 1.2380.

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