- The US dollar is rising across the board thanks to higher returns.
- USD / CAD is still bullish, looking at 1.2650.
The USD / CAD It broke above 1.2625 and rose to 1.2646, reaching the highest level since March 10. The pair then pulled back modestly, and is hovering around 1.2630, on the verge of posting the second consecutive daily gain.
Deteriorating market sentiment and continued strength in the US dollar pushed USD / CAD higher. US yields are moving higher. The 10-year yield was earlier at 1.77%, a new one-year high. The Dow Jones falls 0.12% and the Nasdaq 0.35%.
Economic data in the US was better than expected. CB’s consumer confidence index jumped to 109.7 in March from expectations of 96.9. The key report for the week will be Friday with April Non-Farm Payrolls.
Short term outlook
The bullish outlook on USD / CAD remains intact. The price found resistance at the 55-day simple moving average and the 1.2650 area. A break above it would indicate a higher profit in the short term. The next barrier is seen at 1.2685.
The 20-day moving average sits at 1.2562 and supports the bullish bias. A daily close clearly below it would ease pressure on the loonie, suggesting a possible test of 1.2500.
For USD / CAD to correct lower, market conditions should favor a decline in US bond yields and that appetite for risk continues to prevail among investors.
Technical levels
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