USD/CAD Daily Forecast – Resistance At 1.2625 Remains StrongUSD/CAD gained downside momentum after an unsuccessful test of the resistance at 1.2625.
USD/CAD Video 13.04.21.
U.S. Dollar Is Losing Ground Against Canadian Dollar
USD/CAD is currently trying to settle back below the support at 1.2550 while the U.S. dollar is losing ground against a broad basket of currencies.
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The U.S. Dollar Index is currently trying to settle below the support at the 92 level. In case this attempt is successful, the U.S. Dollar Index will move towards the 50 EMA at 91.80 which will be bearish for USD/CAD.
Today, U.S. reported that Inflation Rate increased by 2.6% year-over-year compared to analyst consensus which called for growth of 2.5%. Core Inflation Rate grew by 1.6% compared to analyst consensus of 1.5%.
The reports indicated that inflation was rising a bit faster than expected but failed to provide additional support to the U.S. dollar on the foreign exchange market. Treasury yields have moved lower after the release of U.S. inflation reports, which served as a bearish catalyst for USD/CAD.
In addition, commodity markets moved higher today which was a bullish development for commodity-related currencies including Canadian dollar.
USD to CAD has recently made another attempt to settle above the resistance at 1.2625 but failed to develop sufficient upside momentum and pulled back towards the support at 1.2550. Currently, USD to CAD is trying to settle below this support level.
In case this attempt is successful, USD to CAD will head towards the support at 1.2525. A move below this level will push USD to CAD towards April lows at 1.2500. If USD to CAD declines below 1.2500, it will move towards the support at 1.2470.
On the upside, the nearest resistance level for USD to CAD is located at the 20 EMA at 1.2560. A move above the 20 EMA will open the way to the test of the resistance at 1.2590. The next resistance level is located at the 50 EMA near 1.2600. In case USD to CAD manages to get back above the 50 EMA, it will move towards the resistance at 1.2625.
For a look at all of today’s economic events, check out our economic calendar.