USD/CAD Daily Forecast – Test Of Resistance At 1.2450

U.S. Dollar Gains Ground Against Canadian Dollar

USD/CAD continues its attempts to settle above the resistance at 1.2450 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index settled above the resistance at 94.20 and is moving towards the next resistance at 94.50. In case the U.S. Dollar Index gets to the test of this level, USD/CAD will get more support.

Today, U.S. reported that Initial Jobless Claims declined from 283,000 to 269,000 compared to analyst consensus of 275,000. Continuing Jobless Claims decreased from 2.24 million to 2.11 million compared to analyst consensus of 2.12 million.

The reports had little impact on USD/CAD dynamics as foreign exchange market traders focused on commodity markets and the general strength of the U.S. dollar.

U.S. dollar managed to gain strong upside momentum against a broad basket of currencies after BoE decided to leave the interest rate unchanged. This decision put strong pressure on GBP/USD and provided broad support to U.S. dollar, which was bullish for USD/CAD.

Technical Analysis

USD to CAD is currently trying to settle above the resistance level at 1.2450. In case this attempt is successful, USD to CAD will move towards the next resistance at the 50 EMA at 1.2485. RSI remains in the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

If USD to CAD settles above the 50 EMA, it will move towards the next resistance level at 1.2500. A move above this level will open the way to the test of the resistance at 1.2530.

On the support side, the nearest support for USD to CAD is located at the 20 EMA at 1.2415. If USD to CAD gets below the 20 EMA, it will move towards the next support level at 1.2400. In case USD to CAD declines below this level, it will head towards the support which is located at 1.2380.

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