USD/CAD Daily Forecast – Test Of Resistance At 1.2500
Canadian Dollar Is Losing Ground Against U.S. Dollar
USD/CAD is currently trying to settle back above 1.2500 while the U.S. dollar is losing ground against a broad basket of currencies.
The U.S. Dollar Index failed to settle below the 50 EMA at 91.90 and returned to the 92 level. The nearest significant resistance level for the U.S. Dollar Index is located at 92.15. In case the U.S. Dollar Index gets to the test of this level, USD/CAD will get more support.
Today, U.S. released the final reading of Manufacturing PMI report for July which indicated that Manufacturing PMI increased from 62.1 in June to 63.4 in July compared to analyst consensus of 63.1. Interestingly, ISM Manufacturing PMI declined from 60.6 to 59.5 compared to analyst consensus of 60.9.
Foreign exchange market traders also focused on dynamics of commodity markets. WTI oil found itself under strong pressure amid worries about the slowdown of China’s manufacturing activity.
Currently, WTI oil is trying to settle below the $71 level. In case this attempt is successful, WTI oil will move towards the psychologically important $70 level which will be bearish for commodity-related currencies including Canadian dollar.
USD to CAD managed to settle back above 1.2480 and is testing the resistance level at 1.2500. In case USD to CAD settles above this level, it will move towards the resistance which is located at the 20 EMA at 1.2515.
A successful test of the resistance at 1.2515 will push USD to CAD towards the next resistance at 1.2550. In case USD to CAD gets above this level, it will head towards the significant resistance level at 1.2590. Back in July, USD to CAD made several attempts to settle above 1.2590 but faced strong resistance.
On the support side, a move below 1.2500 will push USD to CAD towards 1.2480. If USD to CAD declines below this level, it will head towards the support at 1.2450. A move below 1.2450 will lead to the test of the 50 EMA which is located at 1.2440.
For a look at all of today’s economic events, check out our economic calendar.