USD/CAD Daily Forecast – Canadian Dollar Is Under Pressure Ahead Of The Weekend

U.S. Dollar Moves Higher Against Canadian Dollar

USD/CAD is currently trying to get to the test of the resistance at 1.2170 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index gained strong upside momentum and is currently testing the resistance at 90.50. If the U.S. Dollar Index moves above this level, it will get to the test of the 50 EMA at 90.60. A move above the 50 EMA will open the way to the test of the resistance at 90.90 which will be bullish for USD/CAD.

Today, U.S. reported that Consumer Sentiment increased from 82.9 in May to 86.4 in June compared to analyst consensus of 84. The stronger-than-expected Consumer Sentiment report provided additional support to the American currency.

Treasury yields have managed to rebound from recent lows, but it remains to be seen whether they will be able to gain upside momentum. At this point, it looks that traders remain confident that current inflation is temporary. If Treasury yields continue their recent downside trend, the U.S. dollar may find itself under more pressure.

Technical Analysis

USD to CAD managed to get above the resistance at 1.2130 and is moving towards the next resistance level which is located at 1.2170. In case USD to CAD manages to settle above this level, it will head towards the next resistance at 1.2200.

A successful test of the resistance at 1.2200 will push USD to CAD towards the next resistance at 1.2250. No important levels were formed between 1.2200 and 1.2250 so this move may be fast.

On the support side, USD to CAD needs to get back below 1.2130 to have a chance to develop downside momentum in the near term. The next support level is located at the 20 EMA at 1.2105.

If USD to CAD settles below the 20 EMA, it will head towards the next support at 1.2080. A successful test of the support at 1.2080 will open the way to the test of the support level at 1.2065.

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