USD/CAD Daily Forecast – Canadian Dollar Tries To Move Higher At The Start Of The Week

USD/CAD Video 08.02.21.

Canadian Dollar Attempts To Gain Momentum Against U.S. Dollar

USD/CAD is currently trying to settle below the 20 EMA at 1.2770 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to settle below the 91 level but failed to develop downside momentum and rebounded back to the previous range between 91 and 91.10. If the U.S. Dollar Index settles below 91, it will move towards the support level at the 50 EMA at 90.85 which will be bearish for USD/CAD.

There are no important economic reports scheduled to be released today in the U.S. and Canada so foreign exchange market traders will likely focus on general market sentiment. Interestingly, the rally in the oil market failed to provide additional support to the Canadian dollar which remained mostly flat against U.S. dollar.

There was a real rollercoaster in the bond market today as 30-year Treasury yields tested the 2.00% level and then pulled back below 1.94%. Higher yields may provide additional support to the American currency, but today’s moves in the bond market had little impact on the U.S. dollar which swinged back and forth in a tight range against a broad basket of currencies.

Technical Analysis

USD to CAD managed to get below the 20 EMA at 1.2770 and is trying to develop additional downside momentum. The next support level for USD to CAD is located at 1.2750.

If USD to CAD declines below this level, it will head towards the next support at 1.2720. A move below this level will push USD to CAD towards the support at 1.2700. In case USD to CAD gets below the support at 1.2700, it will head towards the support at 1.2665.

On the upside, the previous support at the 20 EMA will likely serve as the first resistance level for USD to CAD. If USD to CAD gets above this level, it will head towards the next resistance at the 50 EMA at 1.2795. A move above this level will open the way to the test of the resistance at 1.2835.

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