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

U.S. Dollar Rallies Against Canadian Dollar

USD/CAD is currently trying to settle above the resistance at 1.2590 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get above the 95 level and is trying to develop additional upside momentum. In case this attempt is successful, it will get to the test of the next resistance at 95.20 which will be bullish for USD/CAD.

It should be noted that RSI for the U.S. Dollar Index remains in the moderate territory, and there is plenty of room to gain additional upside momentum against a broad basket of currencies in the upcoming trading sessions.

No important economic reports are scheduled to be released in the U.S. and Canada today so foreign exchange market traders will focus on general market sentiment.

Currently, traders remain optimistic about U.S. dollar as yesterday’s inflation reports indicated that prices were rising at a robust pace. The Fed is now expected to raise rates in 2022. Potentially, the central bank may be forced to make several rate hikes which will provide additional support to the American currency.

Technical Analysis

USD to CAD managed to settle above the resistance at 1.2550 and is trying to get above the next resistance level which is located at 1.2590. In case USD to CAD manages to settle above this level, it will head towards the resistance at 1.2625.

A move above 1.2625 will open the way to the test of the resistance at 1.2650. If USD to CAD settles above this level, it will head towards the next resistance level at 1.2675.

On the support side, the previous resistance at 1.2550 will serve as the first support level for USD to CAD. In case USD to CAD moves back below this level, it will head towards the support at 1.2530. A successful test of this support level will push USD to CAD towards the next support at 1.2500.

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