USD/CAD Daily Forecast – Canadian Dollar Remains Under Pressure At The Start Of The Week

U.S. Dollar Gains Some Ground Against Canadian Dollar

USD/CAD continues its attempts to settle above the resistance at 1.2590 while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get above the resistance at 92.80 and is slowly moving towards the 93 level. If the U.S. Dollar Index gets above this level, it will get to the test of the resistance at 93.10 which will be bullish for USD/CAD.

Today, U.S. reported that Consumer Inflation Expectations remained unchanged at 4.8% in July while analysts expected that they would decline to 4.7%. The report provided some support to the U.S. dollar but its impact was not significant as Consumer Inflation Expectations remained close to the analyst forecast and did not exceed the 5% level.

Foreign exchange market traders will also continue to monitor the developments in U.S. government bond markets as the yield of 10-year Treasuries is currently trying to settle above 1.30%. In case this attempt is successful, the yield of 10-year Treasuries will head towards the next significant resistance level at the 50 EMA at 1.36% which will be bullish for the American currency.

Technical Analysis

USD to CAD received support at the 20 EMA at 1.2530 and moved back towards the resistance level at 1.2590. In case USD to CAD gets above the resistance at 1.2590, it will head towards the next resistance level which is located at 1.2625.

A move above 1.2625 will open the way to the test of the resistance at 1.2650. If USD to CAD manages to settle above this level, it will head towards the resistance at 1.2685.

On the support side, the nearest support level for USD to CAD is located at 1.2550. In case USD to CAD gets below this level, it will head towards the support at the 20 EMA at 1.2530. A move below the 20 EMA will push USD to CAD towards the support level which is located at 1.2500.

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