USD/CAD Remains Under Pressure Despite Higher Treasury Yields
Key Insights
Treasury yields move to new highs, but this move fails to provide support to the American currency.
U.S. Consumer Confidence drops more than expected.
A successful test of the support at 1.2500 will open the way to the test of the support at 1.2470.
Canadian Dollar Stays Strong Against U.S. Dollar
USD/CAD is trying to settle below the support level at 1.2500, while the U.S. dollar is losing ground against a broad basket of currencies.
The U.S. Dollar Index has settled in the range between the support at 98.35 and the resistance at 98.70. In case the U.S. Dollar Index manages to settle below 98.35, it will move towards the 20 EMA at 98.15, which will be bearish for USD/CAD.
Today, foreign exchange market traders had a chance to take a look at the final reading of Michigan Consumer Sentiment report from the U.S. The report indicated that Consumer Sentiment declined from 62.8 in February to 59.4 in March, compared to analyst consensus of 59.7.
U.S. Pending Home Sales declined by 4.1% month-over-month in February, while analysts expected that they would grow by 1%.
Treasury yields rallied today, but this move failed to provide material support to the U.S. dollar. Currently, the yield of 2-year Treasuries is trying to settle above 2.30%. In case this attempt is successful, it will move towards the next material resistance level at 2.35%, which may be bullish for the American currency.
Technical Analysis
USD to CAD is testing the support level at 1.2500. If USD to CAD settles below this level, it will move towards the next support at 1.2470.
In case USD to CAD declines below the support level at 1.2470, it will head towards the next support, which is located at 1.2450. A successful test of this level will push USD to CAD towards the support at 1.2425.
On the upside, the previous support at 1.2525 will serve as the first resistance level for USD to CAD. If USD to CAD manages to settle above this level, it will move towards the next resistance at 1.2550. A move above 1.2550 will push USD to CAD towards the resistance at 1.2590.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
