USD/CAD Daily Forecast – Canadian Dollar Moves Higher As Commodity Markets Stay Strong

USD/CAD Video 10.05.21.

Test Of Support At 1.2100

USD/CAD is trying to settle below the support at 1.2100 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index continues to move lower and is trying to settle below the support at the 90 level. In case this attempt is successful, the U.S. Dollar Index will head towards the support at 89.75 which will be bearish for USD/CAD.

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

Commodity markets stay strong as traders bet on higher inflation amid robust economic rebound and strong support from central banks and governments, which is bullish for commodity-related currencies like Canadian dollar.

Meanwhile, Treasury yields were swinging between gains and losses today as traders evaluated their next moves after the disappointing U.S. Non Farm Payrolls report which was published on Friday. In case Treasury yields continue their recent trend and move lower, the U.S. dollar may find itself under more pressure.

Technical Analysis

USD to CAD settled below the support at 1.2130 and is testing the next support level at 1.2100.  In case this test is successful, USD to CAD will head towards the support at 1.2065.

A successful test of the support at 1.2065 will push USD to CAD towards the next support at 1.2040. In case USD to CAD declines below this level, it will move towards the support at 1.2000. I’d reiterate that USD to CAD has not visited this territory for several years, and it remains to be seen whether previous levels will be relevant for today’s trading.

On the upside, USD to CAD needs to get back above 1.2100 to have a chance to develop upside momentum in the near term. The next resistance level is located at 1.2130. A move above 1.2130 will push USD to CAD towards the resistance at 1.2170. In case USD to CAD gets above this level, it will head towards the next resistance which is located at 1.2200.

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