USD/CAD Daily Forecast – Canadian Dollar Is Under Pressure
USD/CAD Video 07.01.21.
U.S. Dollar Continues To Gain Ground Against Canadian Dollar
USD/CAD is currently trying to settle above the resistance at 1.2720 while the U.S. dollar is gaining ground against a broad basket of currencies.
The U.S. Dollar Index managed to get above the resistance at 89.75 and is trying to get to the test of the next resistance level at 90. If this attempt is successful, USD/CAD will receive additional support.
Today, the U.S. reported that Initial Jobless Claims declined from 790,000 (revised from 787,000) to 787,000 while Continuing Jobless Claims decreased from 5.2 million (revised from 5.22 million) to 5.07 million. The reports were a bit better than analysts expected but it is clear that the job market needs additional support.
Interestingly, the U.S. dollar is showing strength on the foreign exchange market despite stimulus expectations which have pushed the S&P 500 to new highs. However, it’s too early to talk about any serious rebound as the U.S. Dollar Index remains close to its recent lows and the resistance at the 90 level remains strong.
Meanwhile, the oil rally continues, and higher oil prices may ultimately provide additional support to commodity-related currencies including the Canadian dollar.
USD to CAD is currently testing the nearest resistance level at 1.2720. This resistance level has been tested during yesterday’s trading session and proved its strength.
A move above 1.2720 will open the way to the test of the next resistance level at 1.2750. In case USD to CAD manages to settle above this level, it will head towards the next resistance at the 20 EMA at 1.2775. In case USD to CAD gets above the 20 EMA, it will develop additional upside momentum and head towards the resistance at 1.2800.
On the support side, the nearest support level for USD to CAD is located at 1.2700. If USD to CAD moves below this level, it will decline towards the support level at 1.2665. A move below this level will push USD to CAD towards the next support which is located near the recent lows at 1.2625.
For a look at all of today’s economic events, check out our economic calendar.