USD/CAD Daily Forecast – Canadian Dollar Remains Under Pressure Against U.S. Dollar

U.S. Dollar Gains Some Ground Against Canadian Dollar

USD/CAD continues its attempts to settle above the resistance at 1.2420 while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get back above the resistance at 92.40 and is currently trying to settle above 92.50. In case this attempt is successful, the U.S. Dollar Index will move towards the resistance level at 92.80 which will be bullish for USD/CAD.

Today, U.S. reported that Initial Jobless Claims declined from 415,000 (revised from 411,000) to 364,000 compared to analyst consensus of 390,000. Continuing Jobless Claims increased from 3.41 million (revised from 3.39 million) to 3.47 million compared to analyst consensus of 3.38 million. It looks that foreign exchange market traders focused on the better-than-expected Initial Jobless Claims report which provided more support to the American currency.

The final reading of U.S. Manufacturing PMI report indicated that Manufacturing PMI remained unchanged at 62.1 in June while analysts expected that it would grow to 62.6. This is a a bit surprising as the U.S. economy continues to rebound at a fast pace, but it should be noted that markets have mostly ignored this report.

Technical Analysis

USD to CAD is testing the nearest resistance level which is located at 1.2420. In case USD to CAD manages to get above this level, it will move towards the next resistance level at 1.2450.

A move above the resistance at 1.2450 will open the way to the test of the resistance at 1.2480. If USD to CAD settles above this level, it will move towards the next resistance at 1.2510.

On the support side, the nearest support level for USD to CAD is located at 1.2385. In case USD to CAD manages to settle below this level, it will move towards the next support at 1.2350.

A move below the support at 1.2350 will push USD to CAD towards the support at 1.2325. In case USD to CAD declines below 1.2325, it will head towards the support which is located at the 20 EMA at 1.2300.

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