USD/CAD Daily Forecast – Canadian Dollar Rebounds Against U.S. Dollar

U.S. Dollar Is Under Pressure Against Canadian Dollar

USD/CAD is currently trying to settle below the support at 1.2270 while the U.S. dollar is losing some ground against a broad basket of currencies.

The U.S. Dollar Index has recently tested the support near the recent lows at 91.50 but lost momentum and rebounded towards 91.70. The nearest resistance level for the U.S. Dollar Index is located at 91.80. In case the U.S. Dollar Index manages to get back above this level, it will move towards the resistance at 92 which will be bullish for USD/CAD.

Today, U.S. reported that PCE Price Index grew by 0.4% month-over-month in May compared to analyst consensus of 0.8%. On a year-over-year basis, PCE Price Index increased by 3.9% while analysts expected that it would grow by 4.2%. Core PCE Price Index grew by 3.4% year-over-year, fully in line with analyst expectations.

The U.S. dollar found itself under pressure after the release of these reports as they indicated that inflation was still under control.

Today, foreign exchange market traders also had a chance to take a look at the final reading of Consumer Confidence report for June. The report indicated that Consumer Confidence improved from 82.9 in May to 86.5 in June compared to analyst consensus of 86.4.

Technical Analysis

USD to CAD managed to get back below 1.2300 and made an attempt to settle below the support at 1.2270.

In case USD to CAD manages to settle below this level, it will move towards the next support level which is located at the 20 EMA at 1.2255.  A move below the 20 EMA will push USD to CAD towards the support at the 50 EMA at 1.2245.

On the upside, USD to CAD needs to settle back above 1.2300 to have a chance to develop upside momentum in the near term. The next resistance level for USD to CAD is located at 1.2325.

In case USD to CAD settles above the resistance at 1.2325, it will move towards the resistance at 1.2350. A successful test of this level will open the way to the test of the resistance at 1.2385.

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