USD/CAD Daily Forecast – Choppy Trading Continues

USD/CAD Video 04.02.21.

U.S. Dollar Moves Higher Against Canadian Dollar

USD/CAD is currently trying to settle above the resistance at 1.2835 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index is testing the resistance level at 91.50. If this test is successful, the U.S. Dollar Index will gain additional upside momentum and head towards the next resistance level at 91.75 which will be bullish for USD/CAD.

Today, the U.S. reported that Initial Jobless Claims declined from 812,000 (revised from 847,000) to 779,000 as the situation in the job market continued to improve. Meanwhile, Continuing Jobless Claims decreased from 4.79 million (revised from 4.77 million) to 4.59 million.

Better-than-expected employment reports provided additional support to the American currency as they highlighted the relative strength of the U.S. economic recovery.

WTI oil made an attempt to settle above the $56 level but failed to gain additional upside momentum which reduced support for commodity-related currencies including Canadian dollar.

Technical Analysis

USD to CAD continues to trade in a choppy manner as neither bulls nor bears can reach decisive advantage in order to move USD to CAD out of the current range. As a result, USD to CAD continues to trade between the 20 EMA near 1.2775 and the resistance at 1.2880.

Currently, USD to CAD managed to settle above the resistance at the 50 EMA at 1.2800 and is trying to settle above the next resistance level at 1.2835. If USD to CAD manages to get above this level, it will head towards the next resistance at 1.2860. A successful test of this level will push USD to CAD towards the resistance at 1.2880.

On the support side, a move below the 50 EMA at 1.2800 will open the way to the test of the 20 EMA at 1.2775. If USD to CAD settles below 1.2775, it will gain additional downside momentum and head towards the support at 1.2750. A move below the 20 EMA will be a significant development for the market as it will signal that USD to CAD will try to get out of the current trading range in an attempt to start a downside trend.

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