USD/CAD Daily Forecast – Canadian Dollar Gains Ground As Oil Rebounds

U.S. Dollar Declines Against Canadian Dollar

USD/CAD is currently trying to settle below the support at 1.2530 while U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to settle above the resistance at 93.10 but lost momentum and pulled back. In case the U.S. Dollar Index manages to get above this level, it will head towards the resistance at 93.40 which will be bullish for USD/CAD.

Today, foreign exchange market traders focused on dynamics of commodity markets as WTI oil managed to get back above the $68 level and continued to move higher. This move provided support to commodity-related currencies, including Canadian dollar.

Traders will also monitor the developments in U.S. government bond markets as Treasury yields continue to move higher. Currently, the yield of 10-year Treasuries is trying to settle above 1.34%. If Treasury yields gain more ground, U.S. dollar may get additional support.

Technical Analysis

USD to CAD declined below the support level at 1.2550 and is testing the next support level at the 20 EMA at 1.2530. This support level has already been tested several times and proved its strength.

In case USD to CAD manages to settle below the support at the 20 EMA, it will gain additional downside momentum and head towards the next support level which is located at 1.2500.

A move below 1.2500 will open the way to the test of the support at 1.2480. If USD to CAD gets below the support at 1.2480, it will head towards the support at the 50 EMA at 1.2465.

On the upside, the previous support level at 1.2550 will serve as the first resistance level for USD to CAD. If USD to CAD manages to get back above this level, it will head towards the major resistance at 1.2590. In case USD to CAD settles above this important resistance level, it will gain upside momentum and head towards the next resistance at 1.2625.

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