USD/CAD Daily Forecast – Test Of Support At 1.2200

USD/CAD Video 06.05.21.

U.S. Dollar Is Under Strong Pressure Against Canadian Dollar

USD/CAD is currently trying to settle below the support at 1.2200 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index is currently testing the support at the 91 level. If the U.S. Dollar Index declines below this level, it will move towards the support at 90.70 which will be bearish for USD/CAD.

Today, U.S. reported that Initial Jobless Claims decreased from 590,000 (revised from 553,000) to 498,000 while Continuing Jobless Claims increased from 3.65 million (revised from 3.66 million) to 3.69 million.

Tomorrow, foreign exchange market traders will have a chance to take a look at additional employment data from U.S. and Canada. In the U.S., Non Farm Payrolls report is expected to show that U.S. economy added 978,000 jobs in April. Unemployment Rate report is projected to indicate that Unemployment Rate declined from 6% to 5.8%.

In Canada, Employment Change report is expected to show that Canadian economy lost 175,000 jobs in April. Unemployment Rate is expected to increase from 7.5% to 7.8%.

Technical Analysis

USD to CAD managed to settle below the support at 1.2250 and gained strong downside momentum. Currently, USD to CAD is testing the next support level which is located at 1.2200. RSI moved into the oversold territory, but USD to CAD may gain additional downside momentum in case the right catalysts emerge.

If USD to CAD settles below the support at 1.2200, it will move towards the next support level at 1.2170. A successful test of the support at 1.2170 will open the way to the test of the support at 1.2130.

On the upside, USD to CAD needs to stay above 1.2200 to have a chance to develop upside momentum in the near term. The next resistance level for USD to CAD is located at 1.2250.

If USD to CAD gets above this level, it will move towards the resistance at 1.2280. A move above this level will open the way to the test of the resistance at 1.2310.

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