USD/CAD Daily Forecast – Test Of Support At 1.2000

USD/CAD Video 01.06.21.

Canadian Dollar Continues To Move Higher Against U.S. Dollar

USD/CAD has recently made an attempt to settle below the support at 1.2000 but lost momentum and rebounded towards 1.2040 while the U.S. dollar remained under some pressure against a broad basket of currencies.

The U.S. Dollar Index is testing the support level at 89.75. A successful test of this level will open the way to the test of the next support at 89.50 which will be bearish for USD/CAD.

Today, the U.S. released the final reading of Manufacturing PMI report which indicated that Manufacturing PMI increased from 60.5 in April to 62.1 in May compared to analyst consensus of 61.5.

Meanwhile, Construction Spending report showed by Construction Spending increased by 0.2% month-over-month in April compared to analyst consensus which called for growth of 0.5%.

In Canada, Manufacturing PMI declined from 57.2 in April to 57 in May compared to analyst forecast of 58. Canada has also released GDP Growth Rate report for the first quarter which indicated that GDP increased by 1.4% quarter-over-quarter compared to analyst forecast of 3.8%.

I’d note that Treasury yields moved higher today, but this move failed to provide any support to the U.S. dollar which indicates that foreign exchange market traders remain mostly bearish on the American currency.

Technical Analysis

USD to CAD has recently tested the support at 1.2000 but did not manage to develop sufficient downside momentum. In case USD to CAD manages to settle below this support level, it will head towards the next support at 1.1980.

A successful test of the support at 1.1980 will open the way to the test of the support at 1.1945. It should be noted that USD to CAD has not visited this territory for many years so it remains to be seen whether previous levels will be relevant for today’s trading.

On the upside, a move above 1.2040 will push USD to CAD towards the resistance at 1.2065. If USD to CAD gets above this level, it will head towards the resistance at 1.2080. A successful test of the resistance at 1.2080 will open the way to the test of the resistance at 1.2100.

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