USD/CAD Daily Forecast – Canadian Dollar Declines Amid Sell-Off In CommoditiesUSD/CAD is testing the resistance level at 1.2350.
U.S. Dollar Continues To Gain Ground Against Canadian Dollar
USD/CAD is currently trying to settle above 1.2350 while the U.S. dollar is gaining ground against a broad basket of currencies.
The U.S. Dollar Index is currently testing the resistance at 91.80. In case this test is successful, the U.S. Dollar Index will move towards the 92 level which will be bullish for USD/CAD.
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Today, U.S. reported that Initial Jobless Claims increased from 375,000 (revised from 376,000) to 412,000 compared to analyst consensus of 359,000. Continuing Jobless Claims remained unchanged at 3.52 million compared to analyst consensus of 3.43 million.
In Canada, ADP Employment Change report indicated that employment increased by 101,600 jobs in May compared to analyst forecast of 250,000.
The reports had little impact on currency dynamics on the foreign exchange market as traders focused on the new data from the Fed which showed that the Fed expected two rate hikes in 2023.
Canadian dollar received a double blow from the Fed and the sell-off in commodity markets, so USD/CAD managed to get from 1.2200 to 1.2350 in just two trading sessions. If the sell-off in commodity markets continues, Canadian dollar and other commodity-related currencies will move lower.
USD to CAD managed to get above the resistance at 1.2325 and is trying to settle above the next resistance level at 1.2350. RSI has recently moved into the overbought territory, but USD to CAD may gain more upside momentum in case the right catalysts emerge.
If USD to CAD manages to settle above the resistance at 1.2350, it will head towards the next resistance at 1.2385. A successful test of this level will open the way to the test of the resistance at 1.2420. If USD to CAD gets above this level, it will head towards the resistance at 1.2450.
On the support side, the previous resistance at 1.2325 will serve as the first support level for USD to CAD. In case USD to CAD manages to settle below this level, it will head towards the next support level which is located at 1.2300.
For a look at all of today’s economic events, check out our economic calendar.