USD/CAD Daily Forecast – Canadian Dollar Moves Lower As WTI Oil Dives Below $60USD/CAD gained strong upside momentum amid pressure on commodity-related currencies.
USD/CAD Video 23.03.21.
U.S. Dollar Remains Strong Against Canadian Dollar
USD/CAD has recently made an attempt to settle above the resistance at 1.2590 but lost momentum and pulled back towards the support at the 20 EMA at 1.2550 while the U.S. dollar continued to gain ground against a broad basket of currencies.
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The U.S. Dollar Index has managed to settle above the resistance at the 92 level and is currently trying to settle above the next resistance level which is located at 92.25. In case the U.S. Dollar Index manages to settle above this level, it will head towards the resistance at 92.50 which will be bullish for USD/CAD.
Today, the U.S. reported that New Home Sales declined by 18.2% month-over-month in February compared to analyst consensus which called for a decline of 6.5%. Yesterday, Existing Home Sales report indicated that Existing Home Sales decreased by 6.6%.
The reports showed that activity in the housing market began to decline. It should be noted that the recent increase in bond yields may put additional pressure on the housing market, but it remains to be seen whether it will have a material impact on currency dynamics on the foreign exchange market.
Meanwhile, Canadian dollar found itself under pressure as WTI oil declined below the $60 level on fears about the third wave of the virus in Europe. In case WTI oil manages to settle below the recent lows at $58.50, it will gain additional downside momentum which will be bearish for commodity-related currencies including Canadian dollar.
USD to CAD is currently trying to stay above the 20 EMA at 1.2550. If this attempt is successful, USD to CAD will move towards the resistance at 1.2590.
If USD to CAD settles above 1.2590, it will head towards the next resistance which is located at the 50 EMA at 1.2630. A move above the 50 EMA will push USD to CAD towards the resistance at 1.2665.
On the support side, a move below the 20 EMA will open the way to the test of the support at 1.2525. If USD to CAD declines below this level, it will head towards the next support at 1.2500.
For a look at all of today’s economic events, check out our economic calendar.