USD/CAD Daily Forecast – Canadian Dollar Stays Under Pressure

U.S. Dollar Moves Higher Against Canadian Dollar

USD/CAD is currently trying to settle above 1.2760 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get above the resistance at 94.20 and cotninues to move higher. The next significant resistance level for the U.S. Dollar Index is located at 94.60. In case the U.S. Dollar Index gets to the test of this level, USD/CAD will get more support.

WTI oil managed to get back above the $75 level today which was bullish for commodity-related currencies, but dollar’s upside momentum was too strong so foreign exchange market traders ignored the developments in commodity markets.

It looks that many traders have put their protective stops near dollar’s yearly highs. A move above yearly highs has triggered these stops, so the American currency managed to gain strong momentum despite the current pullback in Treasury yields.

Technical Analysis

USD to CAD managed to settle above the resistance at 1.2730 and is testing the next resistance level at 1.2760. RSI remains in the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

If USD to CAD gets above the resistance at 1.2760, it will head towards the next resistance level at 1.2785. A move above this level will lead to the test of the resistance at 1.2800. In case USD to CAD manages to settle above 1.2800, it will move towards the resistance at 1.2830.

On the support side, the previous resistance at 1.2730 will serve as the first support level for USD to CAD. A move below this level will push USD to CAD towards the support at 1.2710. If USD to CAD gets below this level, it will head towards the next support level which is located at the 20 EMA at 1.2685.

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