USD/CAD Gains Ground As WTI Oil Gets Back To The $100 Level

Key Insights

• WTI oil retreats towards the $100 level, which is bearish for the Canadian dollar.
• Demand for safe-haven assets declines, limiting the potential upside for USD/CAD.
• A move above 1.2760 will push USD/CAD back to the resistance at 1.2780.

U.S. Dollar Gains Ground Against Canadian Dollar

USD/CAD is currently trying to settle above the resistance at 1.2760, while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index managed to settle below the support at the 99 level and is testing the next support at 98.70. If the U.S. Dollar Index manages to settle below this level, it will head towards the next support at 98.35, which will be bearish for USD/CAD.

Today, foreign exchange market traders focused on general market sentiment and the dynamics of commodity markets. WTI oil gained strong downside momentum and made an attempt to settle below the $100 level amid hopes for progress in Russia – Ukraine negotiations.

This move put some pressure on commodity-related currencies, including Canadian dollar. In case WTI oil manages to settle below the psychologically important $100 level, it will gain additional downside momentum, which will be bullish for USD/CAD.

Technical Analysis

USD to CAD is testing the resistance level at 1.2760. In case this test is successful, USD to CAD will move towards the next resistance level, which is located at 1.2780.

A move above the resistance at 1.2780 will open the way to the test of the resistance at 1.2800. If USD to CAD manages to settle above this level, it will head towards the next resistance at 1.2830.

On the support side, a move below 1.2760 will push USD to CAD towards the support at the 20 EMA at 1.2745. If USD to CAD declines below this level, it will head towards the next support level at the 50 EMA at 1.2720. A successful test of the support at the 50 EMA will open the way to the test of the support level at 1.2680.

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