USD/CAD Daily Forecast – Another Test Of Support At 1.2525

USD/CAD Video 14.04.21.

U.S. Dollar Is Losing Ground Against Canadian Dollar

USD/CAD is currently trying to settle below the support at 1.2525 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index managed to settle below the 50 EMA at 91.80 and is moving towards the support at 91.50. In case the U.S. Dollar Index manages to get to the test of this level, USD/CAD will find itself under more pressure.

Today, foreign exchange market traders followed the developments in commodity markets which moved higher and provided support to commodity-related currencies like Canadian dollar.

WTI oil gained strong upside momentum after Iran stated that it would enrich uranium up to 60% purity because of the recent attack on its nuclear facility. Currently, WTI oil is trying to settle above the $63 level. If this attempt is successful, Canadian dollar may get more support.

Meanwhile, Treasury yields moved higher, providing some support to the U.S. dollar. However, this support was not sufficient enough to offset the impact of strong commodity markets so USD/CAD moved lower.

Technical Analysis

USD to CAD managed to get below the support at 1.2550 and is trying to settle below the next support level which is located at 1.2525. This support level has been tested several times in recent trading sessions and proved its strength.

In case USD to CAD declines below the support at 1.2525, it will gain downside momentum and head towards the next support level at 1.2500. RSI is in the moderate territory so there is plenty of room to gain downside momentum in case the right catalysts emerge.

If USD to CAD settles below the support at 1.2500, it will move towards the next support at 1.2470. A successful test of the support at 1.2470 will open the way to the test of the support at 1.2450.

On the upside, the previous support at 1.2550 will likely serve as the first resistance level for USD to CAD. A move above this level will lead to a test of the resistance at the 20 EMA at 1.2560. If USD to CAD gets above the 20 EMA, it will move towards the next resistance which is located near the 50 EMA at 1.2590.

For a look at all of today’s economic events, check out our economic calendar.