The USD/CAD pair is strengthening in risk-off trading conditions.

The U.S. dollar gained ground against the Canadian dollar on Tuesday, as market sentiment faced ongoing uncertainty surrounding Greece’s position in the eurozone.

During early U.S. trade, USD/CAD reached 1.2496, marking the session high. The pair later consolidated at 1.2512, showing a 0.37% increase.

In the likely scenario, the pair could find support at 1.2389, representing the low of February 5, while resistance is expected at 1.2590, corresponding to the high of February 4.

Investors maintained a cautious approach amid ongoing negotiations between Greece and the European Union regarding the country’s debt and bailout, contributing to uncertainties over Greece’s position in the euro zone.

Greek Prime Minister Alexis Tsipras reiterated his commitment to fulfilling pre-election promises, which include rolling back austerity measures and rejecting an extension of the international bailout. Instead, Tsipras is pushing for a new agreement to address Greece’s funding requirements until June.

Earlier reports suggested a potential improvement in sentiment as rumors circulated about the European Commission considering a six-month extension to Greece’s bailout program, set to conclude on February 28.

Simultaneously, the U.S. dollar maintained its strength, buoyed by increasing speculation of an earlier Federal Reserve rate hike. The release of a robust U.S. jobs report last week prompted market participants to revise their expectations, anticipating the first rate hike as early as June.

The Canadian dollar weakened against the euro, as indicated by EUR/CAD, which advanced 0.14% to reach 1.4138.

Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.38% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.