USD/CAD Daily Forecast – Canadian Dollar Moves Higher At The Start Of The Week

USD/CAD Video 05.04.21.

U.S. Dollar Is Under Pressure Against Canadian Dollar

USD/CAD is currently trying to settle below the support at 1.2525 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index managed to get below the support at 92.70 and is trying to get to the test of the next support level at 92.50. If the U.S. Dollar Index manages to settle below 92.50, it will head towards the 20 EMA at 92.35 which will be bearish for USD/CAD.

Today, the U.S. reported that Services PMI increased from 59.8 in February to 60.4 in March compared to analyst consensus of 60. Factory Orders report indicated that Factory Orders declined by 0.8% month-over-month in February after growing by 2.7% (revised from 2.6%) in January.

Foreign exchange market traders focused on the optimistic Services PMI report and the recent Non Farm Payrolls data which showed that the U.S. job market continued to recovery. These reports were bullish for riskier currencies and provided support to Canadian dollar despite negative developments on the oil market front.

WTI oil has recently managed to settle below the $60 level and is currently trying to settle below the $59 level on virus worries. If oil gains additional downside momentum, commodity-related currencies may find themselves under pressure.

Technical Analysis

USD to CAD is currently testing the support level at 1.2525. In case this test is successful, USD to CAD will get to the test of the next support level which is located at 1.2500.

If USD to CAD gets below the support at 1.2500, it will move towards the next support level at 1.2470. A successful test of this level will open the way to the test of the support at 1.2450.

On the upside, USD to CAD needs to settle back above 1.2525 to have a chance to develop upside momentum in the near term. The next resistance level is located at 1.2550.

In case USD to CAD gets above this level, it will move towards the resistance at the 20 EMA at 1.2565. A move above the 20 EMA will push USD to CAD towards the resistance at 1.2590.

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