USD/CAD Video 31.05.21.

Canadian Dollar Tries To Gain More Ground Against U.S. Dollar

USD/CAD is currently trying to settle below the support at 1.2065 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has managed to get below the support at the 90 level and is moving towards the next support at 89.75. In case the U.S. Dollar Index declines below this support level, it will head towards the support at 89.50 which will be bearish for USD/CAD.

There are no important economic reports scheduled to be released in the U.S. today as U.S. markets are closed in observance of Memorial Day.

Meanwhile, foreign exchange market traders had a chance to take a look at the latest Producer Prices data from Canada. Producer Prices increased by 1.6% month-over-month in April compared to analyst forecast which called for growth of 1.7%. On a year-over-year basis, Producer Prices grew by 14.3%.

It should be noted that markets do not look worried about inflation right now, but the situation may change quickly if inflation reports from developed countries indicate that prices are rising faster than expected.

Technical Analysis

USD to CAD is currently testing the support level at 1.2065. This support level has already been tested several times in recent trading sessions and proved its strength.

If USD to CAD manages to get below the support at 1.2065, it will move towards the next support level which is located at 1.2040. A successful test of the support at 1.2040 will open the way to the test of the next support level at 1.2000.

On the upside, the nearest resistance level for USD to CAD is located at 1.2080. If USD to CAD gets above this level, it will move towards the next resistance at 1.2100. A move above this level will push USD to CAD towards the 20 EMA at 1.2120. If USD to CAD settles above the 20 EMA, it will get to the test of the resistance at 1.2130.

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

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This article was originally posted on FX Empire

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