USD/CAD Daily Forecast – Another Test Of Support At 1.2590

USD/CAD Video 23.02.21.

Canadian Dollar Is Mostly Flat Against U.S. Dollar

USD/CAD continues its attempts to settle below the nearest support level at 1.2590 while the U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to get below the nearest support level at 90 but failed to develop sufficient downside momentum. As a result, the U.S. Dollar Index remains in the range between the support at 90 and the resistance at 90.30. If the U.S. Dollar Index declines below the support at the 90 level, it will gain additional downside momentum and head towards the next support level at 89.75 which will be bearish for USD/CAD.

Today, foreign exchange market traders were focused on Fed Chair Powell testimony before Congress. Powell did not deliver any surprise. He stated that the economy needed support for some time as the economic recovery remained far from complete. He also reiterated that the Fed remained focused on inflation and employment goals.

U.S. Treasury yields have pulled back a bit from recent highs but it remains to be seen whether Powell managed to calm bond markets. If yields continue to rise, the U.S. dollar may ultimately get additional support.

Technical Analysis

USD to CAD has recently made another attempt to settle below the nearest support level at 1.2590 but did not manage to develop sufficient downside momentum.

In case USD to CAD settles below this level, it will head towards the next support level which is located at 1.2550. A move below the support at 1.2550 will push USD to CAD towards the support at 1.2525.

On the upside, the nearest resistance level for USD to CAD is located at 1.2625. USD to CAD made several attempts to settle above this level in recent trading sessions but these attempts yielded no results.

If USD to CAD manages to settle above the resistance at 1.2625, it will head towards the next resistance level at 1.2665. A move above this level will open the way to the test of the next resistance which is located at the 20 EMA at 1.2685.

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