USD/CAD Daily Forecast – Canadian Dollar Rebounds After Sell-OffUSD/CAD managed to get below the 20 EMA and is trying to settle below the support at 1.2750.
USD/CAD Video 12.01.21.
U.S. Dollar Is Moving Lower Against Canadian Dollar
USD/CAD is testing the support at 1.2750 while the U.S. dollar is losing some ground against a broad basket of currencies.
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The U.S. Dollar Index failed to settle above the resistance at 90.50 and is currently trying to settle below 90.40. If the U.S. Dollar Index manages to get below 90.40, it will head towards the 20 EMA at 90.25 which will be bearish for USD/CAD.
There are no important economic reports scheduled to be released in the U.S. and Canada today so foreign exchange market traders will focus on general market sentiment.
U.S. Treasury yields continue to move higher, and the yield of the 10-year Treasuries has reached 1.18% compared to just 0.92% at the beginning of the year.
Rising yields have provided material support to the American currency but it remains to be seen whether further upside will push U.S. dollar to higher levels.
Meanwhile, the continuation of the rally in the oil market provides support to commodity-related currencies, including Canadian dollar. If WTI oil moves towards the $55 level, Canadian dollar may get a boost.
USD to CAD is currently trying to settle below the nearest support level at 1.2750. If this test is successful, USD to CAD will move towards the next support level at 1.2720.
If USD to CAD declines below the support at 1.2720, it will get to the test of the support at 1.2700. A move below this level will open the way to the test of the support at 1.2665.
On the upside, USD to CAD needs to get back above the 20 EMA at 1.2760 to have a chance to develop upside momentum in the near term. In case USD to CAD manages to settle above the 20 EMA at 1.2760, it will get to the test of the resistance level at 1.2775.
If USD to CAD settles above the resistance at 1.2775, it will move towards the next resistance level which is located at 1.2800.
For a look at all of today’s economic events, check out our economic calendar.