USD/CAD Daily Forecast – Resistance At 1.2550 Stays Strong

USD/CAD Video 19.03.21.

U.S. Dollar Moves Higher Ahead Of The Weekend

USD/CAD gained upside momentum and made an attempt to settle above the resistance at 1.2550 while the U.S. dollar moved higher against a broad basket of currencies.

The U.S. Dollar Index is currently trying to settle above the resistance at the 92 level. RSI is in the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge. If the U.S. Dollar Index settles above 92, it will move towards the resistance at 92.25 which will be bullish for USD/CAD.

Today, Canada reported that Retail Sales declined by 1.1% month-over-month in January while analysts expected that they would decline by 3%. On a year-over-year basis, Retail Sales increased by 1.3%.

Meanwhile, foreign exchange market traders remained focused on the developments in the U.S. government bond markets and commodity markets.

Treasuries had a volatile trading session, and it looks like Treasury yields will stay close to multi-month highs ahead of the weekend. WTI oil  is currently trying to settle above the psychologically important $60 level after yesterday’s major sell-off. If this attempt is successful, commodity-related currencies like Canadian dollar may get more support.

Technical Analysis

USD to CAD is currently trying to stay above the nearest support level at 1.2500. If this attempt is successful, USD to CAD will get to another test of the resistance at 1.2525.

A move above the resistance at 1.2525 will open the way to the test of the next resistance level which is located near the 20 EMA at 1.2550. In case USD to CAD manages to settle above the 20 EMA, it will gain additional upside momentum and head towards the resistance at 1.2590.

On the support side, a move below the support at 1.2500 will push USD to CAD towards the support at 1.2470. In case USD to CAD declines below 1.2470, it will head towards the next support at 1.2450. A move below 1.2450 will open the way to the test of the next support at 1.2425.

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