USD/CAD Daily Forecast – Canadian Dollar Stays Strong As Commodity Markets Move Higher

U.S. Dollar Continues To Lose Ground Against Canadian Dollar

USD/CAD is currently trying to settle below the support at 1.2625 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index managed to get below the 93 level but failed to develop additional downside momentum. The nearest resistance level for the U.S. Dollar Index is located at 93.10. If the U.S. Dollar Index gets back above this level, it will head towards the next resistance at 93.40 which will be bullish for USD/CAD.

Today, foreign exchange market traders had a chance to take a look at New Home Sales report from U.S. The report indicated that New Home Sales increased by 1% month-over-month in July compared to analyst consensus which called for a decline of 2.7%.

It should be noted that the report had minimal impact on USD/CAD dynamics as traders remained focused on dynamics of commodity markets which continued to rebound after FDA granted full approval to Pfizer/BioNTech COVID-19 vaccine. WTI oil is currently testing the 20 EMA near $67.50. In case this test is successful, WTI oil will gain additional upside momentum and head towards the $68 level which will be bullish for Canadian dollar.

Technical Analysis

USD to CAD is currently trying to stay below the 20 EMA at 1.2625. In case this attempt is successful, USD to CAD will get to another test of the next support level at 1.2590.

A move below the support at 1.2590 will open the way to the test of the support at 1.2550. If USD to CAD declines below 1.2550, it will head towards the support at the 50 EMA at 1.2535. A successful test of the support at the 50 EMA will push USD to CAD towards the support at 1.2500.

On the upside, a move above 1.2625 will open the way to the test of the resistance level at 1.2650. If USD to CAD gets back above this level, it will head towards the resistance at 1.2685. A successful test of the resistance at 1.2685 will push USD to CAD towards the next resistance at 1.2710.

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