USD/CAD Daily Forecast – Canadian Dollar Retreats As Commodity Markets Move Lower

U.S. Dollar Moves Higher Against Canadian Dollar

USD/CAD is currently trying to settle above the resistance at 1.2590 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index is trying to settle below the 20 EMA at 92.45. A successful test of this level will push the U.S. Dollar Index towards the support at 92.30 which will be bearish for USD/CAD.

It should be noted that commodity-related currencies are under some pressure today as copper pulls back after the recent rally while WTI oil is under pressure on virus worries. If commodity markets continue to move lower, Canadian dollar may find itself under more pressure.

Today, U.S. reported that Durable Goods Orders increased by 0.8% month-over-month in June compared to analyst consensus of 2.1%. Foreign exchange market traders also had a chance to take a look at Case-Shiller Home Price Index which increased by 17% year-over-year in May compared to analyst consensus which called for growth of 16.4%.

Tomorrow, traders will focus on Fed Interest Rate Decision, but they will also take a look at the latest inflation data from Canada. Analysts forecast that Canada’s Inflation Rate increased by 3.2% year-over-year in June while Core Inflation Rate grew by 2.6%.

Technical Analysis

USD to CAD settled above 1.2560 and is testing the resistance level at 1.2590. This resistance level has already been tested several times in recent trading sessions and proved its strength.

In case USD to CAD manages to get above 1.2590, it will gain additional upside momentum and head towards the resistance at 1.2625. A successful test of this level will push USD to CAD towards the resistance at 1.2650. If USD to CAD settles above the resistance at 1.2650, it will move towards the next resistance at 1.2685.

On the support side, the nearest support level for USD to CAD is located at 1.2560. A move below this level will open the way to the test of the support which is located at the 20 EMA at 1.2535. If USD to CAD gets below the 20 EMA, it will move towards the support at 1.2500.

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