USD/CAD Daily Forecast – Canadian Dollar Declines As Commodities Move Lower

USD/CAD Video 07.04.21.

U.S. Dollar Gains Ground Against Canadian Dollar

USD/CAD is currently trying to settle above the resistance at 1.2625 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index made an attempt to gain downside momentum below the support at the 20 EMA at 92.35 but this attempt yielded no results. In case the U.S. Dollar Index settles back above the 20 EMA, it will head towards the resistance at 92.50 which will be bullish for USD/CAD.

Today, Canadian dollar and other commodity-related currencies found themselves under pressure due to negative dynamics of commodity markets. WTI oil managed to get below the support at the 50 EMA at 59.10 and is moving towards the $58 level.

Copper, which often serves as an important indicator of the mood of commodity investors, is also under pressure. In case the current sell-off continues, Canadian dollar will continue to move lower.

Foreign exchange market traders will also keep an eye on FOMC Minutes which will be published today. Treasury yields have pulled back from recent highs which is bearish for the U.S. dollar, but any signs that the Fed is not as dovish as expected may push yields higher and provide support to the American currency.

Technical Analysis

USD to CAD managed to get above the 50 EMA at 1.2610 and is testing the next resistance level at 1.2625. In case this test is successful, USD to CAD will head towards the next resistance at 1.2665.

If USD to CAD manages to settle above the resistance at 1.2665, it will move towards the next resistance level which is located at 1.2700.

On the support side, a move below the 50 EMA will push USD to CAD back towards the support at 1.2590. If USD to CAD declines below this level, it will head towards the support at the 20 EMA at 1.2570. A successful test of this level will open the way to the test of the support at 1.2550.

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