USD/CAD Daily Forecast – Canadian Dollar Remains Range-Bound

USD/CAD Video 05.02.21.

Canadian Dollar Moves Higher Ahead Of The Weekend

USD/CAD is currently trying to settle below the support at 1.2775 while the U.S. Dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index managed to get below the support at 91.30 and is currently trying to settle below the next support level at 91.10. If this attempt is successful, the U.S. Dollar Index will move towards the 50 EMA at 90.85 which will be bearish for USD/CAD.

Today, U.S. reported that Unemployment Rate declined from 6.7% in December to 6.3% in January. Meanwhile, Non Farm Payrolls report indicated that the economy added 49,000 jobs in January. All recent U.S. employment reports highlighted the recovery of the U.S. job market.

In Canada, Unemployment Rate increased from 8.8% in December to 9.4% in January while analysts expected that it would grow to 8.9%. The Employment Change report indicated that the Canadian economy lost 212,800 jobs in January, which explained the sudden growth of Unemployment Rate.

While Canada’s employment reports were worse than expected, the continued rally in the oil market provided sufficient support to commodity-related currencies on the foreign exchange market. In addition, U.S. Treasury yields have declined from their recent highs which put some pressure on the American currency.

Technical Analysis

USD to CAD continues to trade in the range between the support at the 20 EMA near 1.2775 and the resistance at 1.2880. Today, USD to CAD managed to get below the 50 EMA at 1.2800 and is trying to settle below the 20 EMA at 1.2775.

If USD to CAD manages to settle below the 20 EMA, it will have a chance to develop downside momentum. The next support level for USD to CAD is located at 1.2750.

In case USD to CAD declines below this level, it will head towards the support at 1.2720. A move below 1.2720 will open the way to the test of the next support at 1.2700.

On the upside, USD to CAD needs to get back above the 50 EMA in order to have a chance to develop upside momentum in the near term. The next resistance level is located at 1.2835. If USD to CAD gets above this level, it will have a chance to get closer to high end of the current trading range at 1.2880.

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