USD/CAD Daily Forecast – Another Test Of Support At 1.2570

USD/CAD Video 01.04.21.

Canadian Dollar Tries To Gain More Ground Against U.S. Dollar

USD/CAD continues to test the support at the 20 EMA at 1.2570 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index managed to get below the support at the 93 level and is trying to gain additional downside momentum. If this attempt is successful, the U.S. Dollar Index will get to the test of the support at 92.70 which will be bearish for USD/CAD.

Today, U.S. reported that Initial Jobless Claims increased from 658,000 (revised from 684,000) to 719,000 while Continuing Jobless Claims declined from 3.84 million (revised from 3.87 million) to 3.79 million. The final reading of U.S. Manufacturing PMI showed that Manufacturing PMI increased from 58.6 in February to 59.1 in March compared to analyst consensus of 59.

In Canada, Manufacturing PMI increased from 54.8 in February to 58.5 in March compared to analyst forecast of 55. Building Permits grew by 2.1% month-over-month in February compared to analyst consensus which called for a decline of 1.4%. In general, today’s economic reports indicated that the recovery in the manufacturing segment continued.

Technical Analysis

USD to CAD is currently trying to settle below the nearest support level which is located at the 20 EMA at 1.2570. If this attempt is successful, it will move towards the next support level at 1.2550. This support level has been tested during yesterday’s trading session and proved its strength.

In case USD to CAD settles below the support at 1.2550, it will head towards the next support level at 1.2525. A successful test of the support at 1.2525 will push USD to CAD towards the support at 1.2500.

On the upside, USD to CAD needs to stay above the 20 EMA to have a chance to develop upside momentum in the near term. The next resistance level for USD to CAD is located at 1.2590. A move above this level will open the way to the test of the resistance at the 50 EMA at 1.2615. If USD to CAD gets above the 50 EMA, it will move towards the resistance at 1.2665.

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