USD/CAD Video 10.06.21.
U.S. Dollar Is Mostly Flat Against Canadian Dollar
USD/CAD is still trading near the 20 EMA at 1.2100 while the U.S. dollar is losing some ground against a broad basket of currencies.
The U.S. Dollar Index has recently made an attempt to settle below the support at the 90 level but failed to develop sufficient downside momentum and rebounded back above this level. As a result, the U.S. Dollar Index remains stuck between 90 and the resistance at the 20 EMA at 90.20. If the U.S. Dollar Index gets above the 20 EMA, it will move towards 90.50 which will be bullish for USD/CAD.
Today, the U.S. reported that Inflation Rate increased by 5% year-over-year in May compared to analyst consensus which called for an increase of 4.7%. On a month-over-month basis, Inflation Rate grew by 0.6% compared to analyst consensus of 0.4%. Core Inflation Rate was also higher than expected as it grew by 3.8% year-over-year compared to analyst consensus of 3.4%.
The reports indicated that inflation continued to gain ground but the reaction of foreign exchange market traders was muted. The reaction of the bond market was even more strange as Treasury yields moved to multi-week lows. At this point, it looks that Fed officials managed to calm traders who remain confident that high inflation numbers are temporary.
USD to CAD is currently trying to stay above the 20 EMA at 1.2100. In case USD to CAD manages to stay above this level, it will head towards the resistance at 1.2130.
If USD to CAD gets above 1.2130, it will move towards the next resistance level which is located at 1.2170. A successful test of the resistance at 1.2170 will push USD to CAD towards the resistance at 1.2200.
On the support side, a move below the 20 EMA will push USD to CAD towards the support at 1.2080. If USD to CAD gets below this level, it will move towards the support at 1.2065. A successful test of the support at 1.2065 will open the way to the test of the next support at 1.2040.
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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