USD/CAD Daily Forecast – Test Of Resistance At 1.2420

U.S. Dollar Stays Strong Against Canadian Dollar

USD/CAD is trying to settle above the resistance at 1.2420 while U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index is currently testing the resistance at 92.40. In case this test is successful, the U.S. Dollar Index will move towards the next resistance at 92.80 which will be bullish for USD/CAD.

Today, U.S. released ADP Employment Change report which indicated that private businesses added 692,000 jobs in June compared to analyst consensus of 600,000.

Pending Home Sales report also exceeded expectations as Pending Home Sales grew by 8% month-over-month in May compared to analyst consensus which called for a decline of 0.8%.

Foreign exchange market traders also had a chance to take a look at Producer Prices data from Canada. Producer Prices increased by 2.7% month-over-month In May compared to analyst forecast which called for growth of 3.1%. On a year-over-year basis, Producer Prices increased by 16.4%.

Technical Analysis

USD to CAD has managed to settle above the resistance at 1.2385 and is trying to settle above the next resistance level at 1.2420. RSI is in the moderate territory, and there is plenty of room to gain additional momentum in case the right catalysts emerge.

In case USD to CAD settles above the resistance at 1.2420, it will move towards the next resistance level at 1.2450. A successful test of this level will push USD to CAD towards the resistance at 1.2480. In case USD to CAD gets above 1.2480, it will continue its upside move and head towards the resistance at 1.2510 although it may also face resistance at 1.2500.

On the support side, the previous resistance at 1.2385 will serve as the first support level for USD to CAD. If USD to CAD declines below this level, it will head towards the support at 1.2350. A successful test of this support level will push USD to CAD towards the support at 1.2325. If USD to CAD manages to settle below 1.2325, it will move towards the support at 1.2300.

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