The US dollar is under pressure against the Canadian dollar
USD / CAD is currently trying to settle below 1.2270 support as the US dollar loses ground against a large basket of currencies.
The US dollar index recently tested support near recent lows at 91.50 but lost momentum and rebounded to 91.70. The closest resistance level for the US dollar index is at 91.80. In the event that the US dollar index manages to move above this level, it will head towards resistance at 92 which will be bullish for the USD / CAD.
Today the United States reported that PCE Price Index rose 0.4% month over month in May compared to analyst consensus of 0.8%. Year over year, the PCE price index rose 3.9% while analysts expected growth of 4.2%. The Core PCE price index rose 3.4% year-on-year, which is fully in line with analysts’ expectations.
The US dollar found itself under pressure after the release of these reports as they indicated that inflation was still under control.
Today, forex traders also had the opportunity to take a look at the final reading of Consumer confidence report for June. The report says consumer confidence has improved from 82.9 in May to 86.5 in June compared to analyst consensus of 86.4.
The USD against the CAD managed to move back below 1.2300 and attempted to move below the support at 1.2270.
If the USD to CAD manages to stabilize below this level, it will move to the next support level which is at 20 EMA at 1.2255. A move below the 20 EMA will push the USD towards the CAD towards the support of the 50 EMA at 1.2245.
On the upside, USD / CAD needs to move back above 1.2300 to have a chance to develop short-term bullish momentum. The next level of resistance from USD to CAD is at 1.2325.
If the USD against CAD moves above resistance at 1.2325, it will move towards resistance at 1.2350. A successful test of this level will pave the way for testing the resistance at 1.2385.
For an overview of all of today’s economic events, check out our economic calendar.
This item was originally posted on FX Empire