USD/CAD Daily Forecast – Canadian Dollar Gains Ground Ahead Of The WeekendUSD/CAD declined below the support at 1.2525 and is testing the next support level at 1.2500.
USD/CAD Video 16.04.21.
U.S. Dollar Is Losing Ground Against Canadian Dollar
USD/CAD is trying to settle below the support at 1.2500 while the U.S. dollar is losing ground against a broad basket of currencies.
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The U.S. Dollar Index is currently testing the support at 91.50. In case this test is successful, the U.S. Dollar Index will move towards the support at 91.30 which will be bearish for USD/CAD.
Today, the U.S. reported that Building Permits increased by 2.7% month-over-month in March compared to analyst forecast of 2.9%. Housing Starts grew by 19.4% compared to analyst forecast of 11.2%. The reports showed that the housing market remained strong but they failed to provide additional support tot the American currency.
Yesterday’s decline in Treasury yields continued to put some pressure on the U.S. dollar on the foreign exchange market. Treasury yields were less volatile today ahead of the weekend but volatility may return on Monday. If Treasury yields continue to move lower, the U.S. dollar will find itself under more pressure.
USD to CAD managed to get below the support at 1.2525 and is trying to settle below the next support level which is located at 1.2500. This support level has been tested several times in recent trading sessions and proved its strength.
In case USD to CAD declines below the support at 1.2500, it will head towards the next support level which is located near the recent lows at 1.2470. RSI remains in the moderate territory, and there is plenty of room to gain additional downside momentum in case the right catalysts emerge. In case USD to CAD settles below the support at 1.2470, it will head towards the next support level at 1.2450.
On the upside, the previous support at 1.2525 will serve as the first resistance level for USD to CAD. A move above this level will open the way to the test of the resistance at the 20 EMA at 1.2550. If USD to CAD gets above this level, it will move towards the next resistance at 1.2565.
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