USD/CAD Video 26.03.21.
Canadian Dollar Moves Higher Against U.S. Dollar
USD/CAD is trying to settle below the support at 1.2590 while the U.S. dollar is losing ground against a broad basket of currencies.
The U.S. Dollar Index is currently trying to get to another test of the nearest support level which is located at 92.70. If the U.S. Dollar Index declines below this level, it will head towards the support at 92.50 which will be bearish for USD/CAD.
Today, the U.S. reported that Personal Income declined by 7.1% month-over-month in February while Personal Spending decreased by 1%. The decline of Personal Income on a month-over-month basis is not surprising as it got a major boost in January thanks to stimulus payments. Meanwhile, Personal Spending was under pressure in February due to bad weather.
Foreign exchange market traders also remained focused on the latest developments in commodity markets. WTI oil managed to get above the $61 level as Suez Canal remained blocked by the huge container ship Ever Given. At this point, the problem looks more challenging than the market originally expected.
The rescue teams will try to get fuel and ballast out of the ship, but if this move does not work, they will have to remove all containers which will take many days. This scenario is bullish for oil and also bullish for commodity-related currencies like Canadian dollar.
USD to CAD failed to settle above the resistance at the 50 EMA at 1.2625 and moved below the support at 1.2590. The next support level is located at the 20 EMA at 1.2565.
In case USD to CAD declines below the 20 EMA, it will head towards the support at 1.2550. A successful test of this support level will open the way to the test of the support at 1.2525.
On the upside, USD to CAD needs to get back above 1.2590 to develop upside momentum in the near term. The next resistance level is located at the 50 EMA at 1.2625. A move above this level will push USD to CAD towards the resistance at 1.2665. In case USD to CAD gets above this level, it will head towards the next resistance at 1.2700.
For a look at all of today’s economic events, check out our economic calendar.