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USD/CAD Moves Back To The Resistance At 1.2550

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·2-min read
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Canadian Dollar Is Under Pressure Against U.S. Dollar

USD/CAD is currently trying to settle back above 1.2550 while U.S. dollar is losing some ground against a broad basket of currencies.

The U.S. Dollar Index is stuck in the range between the support at the 50 EMA at 95.60 and the resistance at the 20 EMA at 95.70. In case the U.S. Dollar Index moves above the 20 EMA, it will gain upside momentum and head towards the resistance at 96 which will be bullish for USD/CAD.

Today, foreign exchange market traders had a chance to take a look at Retail Sales report from Canada. The report indicated that Retail Sales increased by 0.7% month-over-month in November compared to analyst consensus which called for growth of 1.2%. On a year-over-year basis, Retail Sales increased by 4.4% compared to analyst forecast of 4.9%.

Traders also continued to monitor the developments in commodity markets. WTI oil made an attempt to settle below the $83 level but failed to develop sufficient downside momentum and rebounded towards the $85 level. A move above this level will push WTI oil towards the resistance at $87 which will be bullish for commodity-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD is testing the resistance level at 1.2550. This resistance level has already been tested several times in recent trading sessions and proved its strength.

In case USD to CAD manages to settle above this level, it will gain additional upside momentum and move towards the resistance at 1.2590. A move above this level will lead to the test of the 20 EMA at 1.2600. In case USD to CAD gets above the 20 EMA, it will head towards the resistance at 1.2625.

On the support side, the previous resistance at 1.2525 will serve as the first support level for USD to CAD. In case USD to CAD settles below this level, it will move towards the next support level which is located at 1.2500. A successful test of this level will push USD to CAD towards the support at 1.2475.

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

This article was originally posted on FX Empire

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