USD/CAD Daily Forecast – Canadian Dollar Rallies As Oil Rebounds
U.S. Dollar Is Under Strong Pressure Against Canadian Dollar
USD/CAD is currently moving towards the support level at 1.2650 while the U.S. dollar is losing ground against a broad basket of currencies.
The U.S. Dollar Index is testing the support level at 93.10. In case this test is successful, the U.S. Dollar Index will move towards the 20 EMA at 92.85 which will be bullish for USD/CAD.
Today, U.S. reported that Manufacturing PMI declined from 63.4 in July to 61.2 in August compared to analyst consensus of 62.5. Services PMI decreased from 59.9 to 55.2 compared to analyst consensus of 59.5 as worries about the spread of the Delta variant of coronavirus hurt sentiment in the services segment.
Foreign exchange market traders also had a chance to take a look at Existing Home Sales report for July. The report indicated that Existing Home Sales increased by 2% month-over-month compared to analyst consensus which called for a decline of 0.7%.
Meanwhile, WTI oil rallied after China reported no new local coronavirus cases. Currently, WTI oil is trying to settle above $65.50. In case this attempt is successful, WTI oil will get to another test of the resistance at the $66 level which will be bullish for commodity-related currencies, including Canadian dollar.
USD to CAD managed to get below the support level at 1.2685 and is trying to get to the test of the next support at 1.2650. If USD to CAD declines below 1.2650, it will head towards the next support which is located near the 20 EMA at 1.2625.
A successful test of the support level at 1.2625 will open the way to the test of the next support at 1.2590.
On the upside, the previous support at 1.2685 will serve as the first resistance level for USD to CAD. If USD to CAD gets back above this level, it will head towards the next resistance at 1.2710.
A move above 1.2710 will push USD to CAD towards the resistance at 1.2730. If USD to CAD moves above 1.2730, it will head towards the resistance at 1.2765.
For a look at all of today’s economic events, check out our economic calendar.