USD/CAD Daily Forecast – Resistance At The 50 EMA Stays StrongUSD/CAD continues its attempts to get above the key resistance level.
USD/CAD Video 29.06.20.
U.S. Dollar Continues To Get Support From Fears About The Second Wave Of Coronavirus
USD/CAD continues its attempts to get above the 50 EMA level at 1.3710. The U.S. dollar was losing ground at the beginning of the day, but a better-than-expected Pending Home Sales report provided support to the American currency.
Surprisingly, Pending Home Sales have increased by 44.3% month-over-month in May which was much better than analyst consensus which called for an increase of 18.9%.
Supported by the good report, the U.S. Dollar Index continued its attempts to settle above the key resistance at 97.5. In case U.S. Dollar Index manages to get above this level, USD/CAD will have a very good chance to develop additional upside momentum above the 50 EMA.
Canada also reported housing data today. Building Permits have increased by 20.2% month-over-month in May. Analysts expected that Building Permits will grow by 15%.
In general, the economic data shows that the rebound of the economic activity is happening faster than previously expected. Theoretically, this should provide support to riskier currencies like the Canadian dollar. However, it looks like fears of the second wave of coronavirus are providing support to safe haven assets like the U.S. dollar.
USD/CAD is trying to settle above the 50 EMA at 1.3710. This is a strong resistance level, and USD/CAD will likely develop significant upside momentum in case it manages to settle above the 50 EMA.
In this scenario, USD/CAD will head towards the next major resistance level at 1.3800. Previously I expected that USD/CAD will face resistance at 1.3730, but the 50 EMA has moved lower and it’s hard to count on significant resistance at 1.3730 in case USD/CAD will manage to get above the 50 EMA at 1.3710.
On the support side, the nearest support level is located at the 20 EMA at 1.3625. A move below the 20 EMA will put USD/CAD back into the trading range between the 20 EMA and the support level at 1.3500.
Now that USD/CAD has settled above the 20 EMA, it tries to establish an upside trend. This upside trend will get significant support once USD/CAD get above the resistance at the 50 EMA at 1.3710.
For a look at all of today’s economic events, check out our economic calendar.