USD/CAD Daily Forecast – Major Resistance At 1.2590 In Sight

U.S. Dollar Gains Ground Against Canadian Dollar At The Start Of The Week

USD/CAD is moving towards the major resistance level at 1.2590 while the U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index continues to test the resistance level at the 20 EMA at 92.55. A successful test of this level will push the U.S. Dollar Index towards the next resistance at 92.80 which will be bullish for USD/CAD.

Today, U.S. released NY Empire State Manufacturing Index report which indicated that NY Empire State Manufacturing Index declined from 43 in July to 18.3 in August compared to analyst consensus of 29.

Meanwhile, Canada reported that Manufacturing Sales increased by 2.1% month-over-month in June, in line with the analyst consensus. Wholesale Sales decreased by 0.8% in June compared to analyst consensus which called for a decline of 1.8%.

Economic reports did not have a major impact on USD/CAD dynamics today as foreign exchange market traders focused on the latest developments in the oil market. WTI oil found itself under pressure after the release of disappointing economic data from China which was bearish for commodity-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD managed to get back above 1.2550 and is trying to get to the test of the major resistance level at 1.2590. In case USD to CAD settles above this level, it will gain additional upside momentum and move towards the next resistance at 1.2625.

A successful test of the resistance at 1.2625 will push USD to CAD towards the resistance at 1.2650. If USD to CAD moves above this level, it will head towards the resistance at 1.2685.

On the support side, the nearest support level for USD to CAD is located at 1.2550. In case USD to CAD declines back below this level, it will move towards the support at the 20 EMA at 1.2530. A move below the 20 EMA will push USD to CAD back towards the significant support level at 1.2500.

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