USD/CAD Daily Forecast – Strong Oil Provides Some Support To Canadian Dollar
Canadian Dollar Tries To Rebound Against U.S. Dollar
USD/CAD is currently trying to settle back below the support at 1.2690 while the U.S. dollar is moving higher against a broad basket of currencies.
The U.S. Dollar Index has recently made an attempt to settle above the resistance level at 93.40 but failed to develop sufficient upside momentum. In case the U.S. Dollar Index manages to settle above this level, it will head towards the resistance near the yearly highs at 93.75 which will be bullish for USD/CAD.
Today, U.S. reported that New Home Sales increased by 1.5% month-over-month in August compared to analyst consensus which called for growth of just 0.5%.
Foreign exchange market traders also kept an eye on the developments in U.S. government bond markets as Treasury yields moved to multi-week highs. Currently, the yield of 10-year Treasuries is trying to settle above 1.45%. In case this attempt is successful, it will continue to move towards the psychologically important 1.50% level which will be bullish for the U.S. dollar.
While the U.S. dollar is supported by higher Treasury yields, its gains against Canadian dollar are limited as WTI oil moved to new highs and made an attempt to settle above the $74 level.
USD to CAD has recently made an attempt to settle above the resistance at 1.2730 but lost momentum and declined below the 20 EMA at 1.2690. The nearest support level for USD to CAD is located at 1.2650.
In case USD to CAD declines below the support at 1.2650, it will head towards the next support level which is located at the 50 EMA near 1.2625. A successful test of this level will push USD to CAD towards the support at 1.2590.
On the upside, USD to CAD needs to get back above the 20 EMA to have a chance to develop upside momentum in the near term. The next resistance level is located at 1.2710. If USD to CAD manages to settle above this level, it will move towards the resistance at today’s highs at 1.2730.
For a look at all of today’s economic events, check out our economic calendar.