U.S. Dollar Remains Under Pressure
USD/CAD is currently trying to get below 1.2475 while U.S. dollar is gaining ground against a broad basket of currencies.
The U.S. Dollar Index is testing the support level at 94.75. If this test is successful, the U.S. Dollar Index will move towards the next support at 94.50 which will be bearish for USD/CAD.
Today, foreign exchange market traders focused on economic data from U.S. Initial Jobless Claims report indicated that 230,000 Americans filed for unemployment benefits in a week compared to analyst consensus of 200,000. Continuing Jobless Claims declined from 1.75 million to 1.56 million.
Interestingly, Producer Prices increased by just 0.2% month-over-month in December while analysts expected that they would grow by 0.4%. On a year-over-year basis, Producer Prices grew by 9.7% compared to analyst consensus which called for growth of 9.8%.
WTI oil is mostly flat today, and its dynamics had little impact on USD/CAD. However, in case WTI oil manages to settle above the $83 level, it will gain additional upside momentum and move towards the psychologically important $85 level which will be bullish for commodity-related currencies, including Canadian dollar.
USD to CAD has recently made an attempt to settle below the support level at 1.2475. In case USD to CAD manages to settle below this level, it will move towards the next support at 1.2450.
A successful test of the support at 1.2450 will open the way to the test of the support level which is located at 1.2425. If USD to CAD declines below this level, it will move towards the support level at 1.2400.
On the upside, the previous support level at 1.2500 will serve as the first resistance level for USD to CAD. If USD to CAD moves above this level, it will head towards the resistance at 1.2530.
A move above 1.2530 will push USD to CAD towards the next resistance level at 1.2550. In case USD to CAD manages to settle above this level, it will head towards the resistance at 1.2590.
For a look at all of today’s economic events, check out our economic calendar.