USD/CAD Daily Forecast – Canadian Dollar Is Losing Ground Ahead Of The Weekend

USD/CAD Video 21.05.21.

U.S. Dollar Moves Higher Against Canadian Dollar

USD/CAD failed to settle below the support at 1.2040 and moved towards the resistance at 1.2080 while the U.S. dollar gained ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get above the 90 level and is trying to move higher. The next resistance level for the U.S. Dollar Index is located at 90.30. If the U.S. Dollar Index gets to the test of this level, USD/CAD will get more support.

Today, the U.S. reported that Manufacturing PMI increased from 60.5 in April to 61.5 in May compared to analyst consensus of 60.2. Services PMI improved from 64.7 to 70.1 compared to analyst consensus of 64.5.

Strong PMI reports have initially boosted Treasury yields, but bond markets calmed down and Treasury yields have already returned to previous levels. Interestingly, the U.S. dollar remained strong even after yields began to move lower.

U.S. has also reported that Existing Home Sales declined by 2.7% in April after falling by 3.7% in March. Analysts expected that Existing Home Sales would grow by 2%.

Foreign exchange market traders also had a chance to take a look at Retail Sales data from Canada. Retail Sales increased by 3.6% month-over-month in March compared to analyst consensus which called for growth of 2.3%. On a year-over-year basis, Retail Sales grew by 23.7%.

Technical Analysis

USD to CAD is currently trying to get above the resistance at 1.2080. In case this attempt is successful, it will head towards the next resistance level which is located at 1.2100.

A move above the resistance at 1.2100 will push USD to CAD towards the resistance at 1.2130. The resistance at 1.2130 has already been tested several times and proved its strength. A move above this level will signal that USD to CAD is ready to gain additional upside momentum.

On the support side, the nearest support level is located at 1.2065. If USD to CAD settles below this level, it will head towards the support at 1.2040. A move below the support at 1.2040 will push USD to CAD towards the next support which is located at 1.2000.

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