USD/CAD Daily Forecast – Canadian Dollar Is Under Significant Pressure

U.S. Dollar Moves Higher Against Canadian Dollar

USD/CAD is currently trying to settle back above the resistance at 1.2625 while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get above the resistance at the 50 EMA at 92.40 and made an attempt to settle above 92.50. In case the U.S. Dollar Index manages to settle above 92.50, it will get to the test of the resistance at the 20 EMA at 92.60 which will be bullish for USD/CAD.

There are no important economic reports scheduled to be released in the U.S. and Canada today. Tomorrow, traders will focus on the Bank of Canada Interest Rate Decision and commentary which may have a material impact on USD/CAD dynamics.

Traders will also continue to monitor the developments in U.S. government bond markets. The yield of 10-year Treasuries has recently made an attempt to settle above August highs near 1.38% but failed to develop sufficient upside momentum and pulled back. A move above 1.38% will open the way to the test of the next resistance at 1.42% which will be bullish for the U.S. dollar.

Technical Analysis

USD to CAD managed to get above the 20 EMA at 1.2600 and is testing the next resistance level at 1.2625. In case USD to CAD settles back above this level, it will move towards the next resistance level which is located at 1.2650.

A successful test of the resistance at 1.2650 will push USD to CAD towards the next resistance level at 1.2685. If USD to CAD gets above this level, it will continue its upside move and head towards the resistance at 1.2710.

On the support side, the nearest support level for USD to CAD is located at the 20 EMA. A move below the 20 EMA will lead to the test of the support at 1.2590. In case USD to CAD settles back below this level, it will head towards the next support at the 50 EMA at 1.2560.

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