USD/CAD Daily Forecast – Test Of Support At 1.2270

U.S. Dollar Continues To Lose Ground Against Canadian Dollar

USD/CAD  has recently made an attempt to settle below the support at 1.2270 but lost momentum and rebounded closer to 1.2300 while the U.S. dollar declined against a broad basket of currencies.

The U.S. Dollar Index managed to settle below the support at 91.80 and made an attempt to get to the test of the next support level at 91.40. In case the U.S. Dollar Index gets to the test of this level, USD/CAD will find itself under more pressure.

Today, U.S. reported that Manufacturing PMI increased from 62.1 in May to 62.6 in June compared to analyst consensus of 61.5. Meanwhile, Services PMI declined from 70.4 in May to 64.8 in June compared to analyst consensus of 70.

U.S. has also released New Home Sales report which indicated that New Home Sales declined by 5.9% month-over-month in May compared to analyst consensus which called for a decline of 2.1%.

Foreign exchange market traders also had a chance to take a look at the latest Retail Sales data from Canada. Retail Sales declined by 5.7% month-over-month in April compared to analyst consensus which called for a decline of 5%. Excluding Autos, Retail Sales decreased by 7.2%.

Technical Analysis

USD to CAD settled below the support at 1.2300 and made an attempt to settle below the next support level which is located at 1.2270. In case USD to CAD manages to settle below this level, it will head towards the next support level at 1.2250.

A move below the support at 1.2250 will lead to the test of the support which is located at the 50 EMA at 1.2240. The 20 EMA is located at the same level, and USD to CAD will likely get material support in the 1.2240 – 1.2250 area.

On the upside, the previous support level at 1.2300 will serve as the first resistance level for USD to CAD. If USD to CAD gets above 1.2300, it will head towards the next resistance at 1.2325. A successful test of this level will open the way to the test of the next resistance at 1.2350.

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