USD/CAD Daily Forecast – Consolidation Near 1.2100 Continues

USD/CAD Video 28.05.21.

U.S. Dollar Gains Some Ground Against Canadian Dollar

USD/CAD has recently made an attempt to settle above the resistance at 1.2100 and pulled back as the U.S. dollar lost upside momentum against a broad basket of currencies.

The U.S. Dollar Index tried to settle above the resistance at the 20 EMA at 90.30 but lost momentum and declined towards the support at the 90 level. In case the U.S. Dollar Index settles below the 90 level, it will move towards the next support at 89.75 which will be bearish for USD/CAD.

Today, the U.S. reported that Personal Income declined by 13.1% month-over-month in April after growing by 20.9% (revised from 21.1%) in March. Personal Spending increased by 0.5% after growing by 4.7% (revised from 4.2%) in March.

The final reading of Michigan Consumer Sentiment report indicated that Consumer Sentiment declined from 88.3 in April to 82.9 in May, in line with the analyst consensus.

The yield of 10-year Treasuries has recently made an attempt to settle above the 20 EMA at 1.61% but failed to develop sufficient upside momentum and pulled back below 1.60% which was bearish for the U.S. dollar. If Treasury yields move lower in the upcoming trading sessions, the American currency may find itself under more pressure.

Technical Analysis

USD to CAD continues to consolidate near 1.2100. If USD to CAD manages to settle above this level, it will head towards the resistance at the 20 EMA at 1.2130.

A move above the 20 EMA at 1.2130 will push USD to CAD towards the resistance at 1.2170. In case USD to CAD gets above this level, it will move towards the next resistance level which is located at 1.2200.

On the support side, USD to CAD needs to settle below 1.2080 to have a chance to gain downside momentum in the near term. The next support level is located at 1.2065. If USD to CAD declines below the support at 1.2065, it will move towards the support which is located at 1.2040.

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