USD/CAD Daily Forecast – Canadian Dollar Declines Against U.S. Dollar

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

USD/CAD is testing the resistance level at 1.2590 while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index is currently trying to get above the 93 level. If the U.S. Dollar Index manages to settle above this level, it will move towards the resistance at 93.10 which will be bullish for USD/CAD.

Today, foreign exchange market traders had a chance to take a look at flash PMI reports from U.S. Manufacturing PMI increased from 62.1 in June to 63.1 in July compared to analyst consensus of 62.

Services PMI declined from 64.6 to 59.8 compared to analyst consensus of 64.8. It looks that workforce challenges and worries about the new wave of the virus have put pressure on sentiment in the services segment.

Meanwhile, Canada provided Retail Sales data for May. Retail Sales declined by 2.1% month-over-month in May compared to analyst consensus which called for a decline of 3%. On a year-over-year basis, Retail Sales increased by 24.6% as they were weak in May 2020.

Technical Analysis

USD to CAD is currently trying to settle above the resistance at 1.2590. This resistance level has been tested during yesterday’s trading session and proved its strength.

In case USD to CAD manages to settle above the resistance at 1.2590, it will move towards the next resistance level at 1.2625. A successful test of this resistance level will push USD to CAD towards the next resistance at 1.2650. If USD to CAD gets above this level, it will head towards the resistance at 1.2685.

On the support side, USD to CAD needs to settle below 1.2560 to have a chance to develop downside momentum in the near term. The next support level for USD to CAD is located at 1.2540. If USD to CAD declines below this level, it will move towards the support level which is located at the 20 EMA at 1.2525.

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