USD/CAD Daily Forecast – Resistance At 1.2625 Stays Strong
Canadian Dollar Is Mostly Flat Against U.S. Dollar
USD/CAD continues to trade near the resistance level at 1.2625 while the U.S. dollar is losing ground against a broad basket of currencies.
The U.S. Dollar Index is currently trying to settle below the support level at the 20 EMA at 92.45. In case the U.S. Dollar Index declines below this level, it will move towards the support at 92.30 which will be bearish for USD/CAD.
Today, U.S. released ADP Employment Change report which indicated that private businesses hired 374,000 workers in August compared to analyst consensus of 613,000. The weak report put some pressure on the U.S. dollar, but many traders will wait for the U.S. Non Farm Payrolls report which will be released on Friday before making final conclusions.
Foreign exchange market traders also had a chance to take a look at the final reading of U.S. Manufacturing PMI report. The report showed that Manufacturing PMI declined from 63.4 in July to 61.1 in August compared to analyst consensus of 61.2. In Canada, Manufacturing PMI increased from 56.2 in July to 57.2 in August while analysts expected that it would decline to 54.
USD to CAD continues its attempts to settle above the resistance at 1.2625 but this resistance level stays strong. In case USD to CAD finally manages to settle above this level, it will head towards the next resistance at 1.2650.
If USD to CAD gets above 1.2650, it will move towards the resistance level at 1.2685. A successful test of this level will push USD to CAD towards the next resistance at 1.2710.
On the support side, the nearest support level for USD to CAD is still located at 1.2590. This support level has already been tested many times and proved its strength.
A move below the support at 1.2590 will indicate that USD to CAD is ready to develop additional downside momentum. In this scenario, it may quickly get to the test of the 50 EMA at 1.2560. In case USD to CAD declines below the 50 EMA, it will move towards the support level at 1.2530.
For a look at all of today’s economic events, check out our economic calendar.