Canadian Dollar Moves Higher Against U.S. Dollar
USD/CAD failed to settle above the resistance at 1.2590 and pulled back while the U.S. dollar gained some ground against a broad basket of currencies.
The U.S. Dollar Index has recently made an attempt to get above 92.70 but lost momentum and pulled back towards 92.60. The nearest significant resistance level for the U.S. Dollar Index is located at 92.80. In case the U.S. Dollar Index gets to the test of this level, USD/CAD will get more support.
Canada has recently reported that Inflation Rate increased by 0.3% month-over-month in June compared to analyst consensus which called for growth of 0.4%. On a year-over-year basis, Inflation Rate grew by 3.1% compared to analyst consensus of 3.2%. Core Inflation Rate increased by 2.7% year-over-year.
Canada’s inflation was a bit lower than expected, but foreign exchange market traders will stay focused on the main event of the day. Soon, the Fed will announce its Interest Rate Decision and provide additional commentary. Any talk about potential adjustment of the asset purchase program may provide material support to the American currency.
USD to CAD did not manage to settle above the resistance level at 1.2590 and is moving towards the nearest support level at 1.2560. In case USD to CAD manages to settle below this level, it will head towards the support which is located at the 20 EMA near 1.2540.
A move below the 20 EMA will open the way to the test of the support at 1.2500. If USD to CAD gets below the support at 1.2500, it will head towards the next support level at 1.2485.
On the upside, the nearest resistance level for USD to CAD is still located at 1.2590. A successful test of this level will push USD to CAD towards the next resistance at 1.2625.
In case USD to CAD manages to settle above 1.2625, it will head towards the next resistance at 1.2650. A move above the resistance at 1.2650 will open the way to the test of the resistance at 1.2685.
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