USD/CAD Daily Forecast – Canadian Dollar Lacks Momentum

USD/CAD Video 08.06.21.

U.S. Dollar Gains Some Ground Against Canadian Dollar

USD/CAD is currently trying to settle above the 20 EMA at 1.2100 while the U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index is currently located in the range between the support at the 90 level and the resistance at the 20 EMA at 90.20. In case the U.S. Dollar Index manages to settle above the 20 EMA, it will move towards 90.50 which will be bullish for USD/CAD.

Today, foreign exchange market traders had a chance to take a look at trade balance data from U.S. and Canada but these reports had no impact on currency dynamics.

Volatility is low, and traders are waiting for Bank of Canada Interest Rate Decision which will be released tomorrow. The rate is expected to stay unchanged at 0.25%, and the market will focus on Bank’s commentary.

On Thursday, attention will shift to the main event of the week. U.S. will release inflation reports, and traders will see whether Inflation Rate exceeded the analyst consensus of 4.7% in May, which will be bullish for the American currency.

It should be noted that trading may remain choppy ahead of the release of U.S. inflation data, and even the BoC Interest Rate Decision may fail to serve as a meaningful catalyst for USD/CAD as the market is focused on the upcoming U.S. inflation data.

Technical Analysis

USD to CAD is currently trying to get above the resistance at the 20 EMA at 1.2100. In case this attempt is successful, USD to CAD will move towards the next resistance level which is located at 1.2130.

If USD to CAD gets above this level, it will head towards the resistance at 1.2170. A successful test of this level will push USD to CAD towards the resistance at 1.2200.

On the support side, the nearest support level is located at 1.2080. A move below this level will open the way to the test of the support at 1.2065. If USD to CAD declines below 1.2065, it will head towards the support at 1.2040.

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