USD/CAD Daily Forecast – Support At 1.2470 Stays Strong

USD/CAD Video 23.04.21.

Canadian Dollar Tries To Gain More Ground Against U.S. Dollar

USD/CAD has recently made another attempt to settle below the support at 1.2470 but failed to develop sufficient downside momentum and rebounded back towards 1.2500 while the U.S. dollar remained under pressure against a broad basket of currencies.

The U.S. Dollar Index continues to test the support level at 91. A move below this support level will push the U.S. Dollar Index towards the support at 90.70 which will be bearish for USD/CAD.

Today, foreign exchange market traders had a chance to take a look at flash PMI reports from the U.S. Manufacturing PMI increased from 59.1 in March to 60.6 in April compared to analyst consensus of 60.5. Services PMI improved from 60.4 to 63.1 compared to analyst consensus of 61.9. The reports highlighted the strong rebound of the U.S. economy which is not surprising as it is supported by the huge stimulus package.

Meanwhile, New Home Sales report indicated that New Home Sales increased by 20.7% month-over-month in March compared to analyst consensus which called for growth of 12%.

It should be noted that Treasury yields have rebounded from weekly lows but this upside move did not provide support to the U.S. dollar as strong PMI reports from around the world boosted demand for riskier currencies.

Technical Analysis

USD to CAD tried to settle below the major support level at 1.2470 but rebounded closer to the resistance at 1.2500. In case USD to CAD gets above the resistance at 1.2500, it will head towards the next resistance at 1.2525.

A move above this level will push USD to CAD towards the 20 EMA at 1.2540. If USD to CAD settles above the 20 EMA, it will head towards the resistance at 1.2565.

On the support side, USD to CAD needs to settle below the support at 1.2470 to have a chance to gain additional downside momentum. The next support level is located at 1.2450. If USD to CAD settles below this support level, it will move towards the support at 1.2425.

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