USD/CAD Daily Forecast – Support At 1.2590 Stays Strong

USD/CAD Video 22.02.21.

Canadian Dollar Gains Ground At The Start Of The Week

USD/CAD has recently made another attempt to settle below the support level at 1.2590 while the U.S. dollar remained under pressure against a broad basket of currencies.

The U.S. Dollar Index managed to settle below the support at 90.30 and declined closer to the next support at the 90 level. If the U.S. Dollar Index manages to settle below 90, it will head towards the next support level at 89.75 which will be bearish for USD/CAD.

No important economic reports were scheduled to be released in the U.S. and Canada today so foreign exchange market traders focused on general market mood and commodity price dynamics.

WTI oil managed to get back above the $60 level and is currently trying to settle above the $61 level which is bullish for commodity-related currencies. If WTI oil gets to the test of the next material resistance level at the recent highs at $62.25, Canadian dollar will get additional support.

Interestingly, rising Treasury yields failed to provide sufficient support to the American currency, and the U.S. dollar gained downside momentum at the beginning of the week. Most likely, traders were focused on the upcoming U.S. stimulus package and decided to ignore the increase in Treasury yields.

Technical Analysis

USD to CAD tried to settle below the nearest support level at 1.2590 but did not manage to develop sufficient downside momentum. RSI is in the moderate territory, so there is plenty of room to develop momentum in case the right catalysts emerge.

If USD to CAD declines below the support at 1.2590, it will move towards the next support level which is located at 1.2550. A successful test of this level will open the way to the test of the support at 1.2525.

On the upside, the nearest resistance level for USD to CAD is located at 1.2625. In case USD to CAD gets above this level, it will head towards the next resistance at 1.2665. A move above this level will push USD to CAD towards the resistance at the 20 EMA at 1.2690.

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