USD/CAD Daily Forecast – Test Of Support At 1.2650

U.S. Dollar Is Under Pressure Against Canadian Dollar

USD/CAD is currently trying to settle back below the support at 1.2650 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to get back above the 20 EMA at 92.60 but failed to develop sufficient upside momentum and declined closer to 92.50. The nearest support level for USD/CAD is located at the 50 EMA at 92.45. A move below the 50 EMA will push the U.S. Dollar Index towards the support at 92.30 which will be bearish for USD/CAD.

Today, U.S. reported that Initial Jobless Claims declined from 345,000 (revised from 340,000) to 310,000 compared to analyst consensus of 335,000. Continuing Jobless Claims decreased from 2.81 million (revised from 2.75 million) to 2.78 million compared to analyst consensus of 2.74 million.

Foreign exchange market traders also continued to monitor the developments in U.S. government bond markets. The yield of 10-year Treasuries managed to settle below 1.35% and made an attempt to settle below the 50 EMA at 1.33%. A move below the 50 EMA will likely put more pressure on the American currency.

Meanwhile, WTI oil moved closer to the psychologically important $70 level and provided support to commodity-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD managed to settle below the support level at 1.2685 and is testing the next support at 1.2650. In case this test is successful, USD to CAD will move towards the next support level at 1.2625.

A successful test of this level will open the way to the test of the support at the 20 EMA at 1.2615. If USD to CAD declines below the 20 EMA, it will move towards the support at 1.2590.

On the upside, the previous support level at 1.2685 will serve as the first resistance level for USD to CAD. A move above this level will push USD to CAD towards the next resistance at 1.2710. A successful test of the resistance at 1.2710 will open the way to the test of the resistance at 1.2730.

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