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

USD/CAD Video 20.05.21.

U.S. Dollar Is Losing Ground Against Canadian Dollar

USD/CAD is currently testing the support at 1.2065 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index is trying to get below the support at 89.75. In case the U.S. Dollar Index declines below this level, it will head towards the next support at 89.50 which will be bearish for USD/CAD.

Today, U.S. reported that Initial Jobless Claims declined from 478,000 (revised from 473,000) to 444,000 compared to analyst consensus of 450,000. Meanwhile, Continuing Jobless Claims increased from 3.64 million (revised from 3.66 million) to 3.75 million. Markets focused on the positive Initial Jobless Claims report which provided support to riskier assets.

Canada’s ADP Employment Change report indicated that employment increased by  351,300 in April compared to analyst forecast of 500,000. New Housing Price Index increased by 9.9% year-over-year compared to analyst consensus which called for growth of 8.9%.

Technical Analysis

USD to CAD settled below the support at 1.2080 and is trying to settle below the next support level at 1.2065. This support level has been tested during yesterday’s trading session and proved its strength.

RSI is close to the oversold territory, but there is enough room to develop additional downside momentum in case the right catalysts emerge. If USD to CAD declines below the support at 1.2065, it will head towards the next support level which is located at 1.2040.

A successful test of the support at 1.2040 will open the way to the test of the next support at 1.2000.

On the upside, the previous support level at 1.2080 will serve as the first resistance level for USD to CAD. If USD to CAD settles above this level, it will move towards the resistance at 1.2100.

In case USD to CAD gets above the resistance at 1.2100, it will head towards the next resistance at 1.2130. A successful test of this level will push USD to CAD towards the next resistance which is located at 1.2170.

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