USD/CAD Daily Forecast – Canadian Dollar Looks Strong Against U.S. Dollar

USD/CAD Video 02.06.21.

U.S. Dollar Is Under Pressure Against Canadian Dollar

USD/CAD is currently trying to settle below the support at 1.2040 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index faced resistance at the 20 EMA at 90.20 and pulled back below the 90 level. The nearest support level for the U.S. Dollar Index is located at 89.75. In case the U.S. Dollar Index gets to the test of this level, USD/CAD will find itself under more pressure.

Today, Canada reported that Building Permits declined by 0.5% month-over-month in April compared to analyst consensus which called for a decline of 4.8%.

Tomorrow, foreign exchange market traders will focus ont he economic data from the U.S. ADP Employment Change report is expected to show that private businesses hired 650,000 wrokers in May. Initial Jobless Claims are expected to decline from 406,000 to 390,000 while Continuing Jobless Claims are projected to decrease from 3.64 million to 3.62 million.

The market will also pay attention to the final reading of Services PMI report for May which is expected to show that Services PMI increased from 64.7 in April to 70.1 in May.

Technical Analysis

USD to CAD managed to settle back below 1.2065 and is trying to get below the support at 1.2040. In case this attempt is successful, USD to CAD will head towards the next support level which is located at 1.2000.

A move below the support at 1.2000 will open the way to the test of the support at 1.1980. In case USD to CAD declines below this level, it will head towards the support at 1.1945.

On the upside, USD to CAD needs to settle back above 1.2065 to have a chance to develop upside momentum in the near term. In case USD to CAD manages to settle above this level, it will head towards the resistance at 1.2080. A move above the resistance at 1.2080 will push USD to CAD towards the next resistance at 1.2100. The 20 EMA is in the nearby so USD to CAD will likely face significant resistance near 1.2100.

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