USD/CAD Daily Forecast – Test Of Support At 1.2670

USD/CAD Video 05.03.21.

U.S. Dollar Is Mostly Flat Against Canadian Dollar

USD/CAD has recently made an attempt to settle above the resistance at the 50 EMA at 1.2715 but lost momentum and pulled back while the U.S. dollar gained ground against a broad basket of currencies.

The U.S. Dollar Index is currently trying to settle above the resistance at the 92 level. RSI is close to the overbought territory but there is plenty of room to gain additional upside momentum in case the right catalysts emerge. If the U.S. Dollar Index settles above 92, it will head towards the next resistance level at 92.25 which will be bullish for USD/CAD.

Today, U.S. reported that Unemployment Rate declined from 6.3% in January to 6.2% in February compared to analyst consensus of 6.3%. Meanwhile, Non Farm Payrolls report indicated that the U.S. economy added 379,000 jobs in February. The report significantly exceeded analyst expectations.

Foreign exchange market traders continued to monitor the developments in the U.S. government bond market. Today, Treasury yields failed to continue their upside move but remained close to multi-month highs, providing support to the American currency.

Meanwhile, the continuation of the oil price rally provided some support to Canadian dollar, but this support was not sufficient enough for an upside move.

Technical Analysis

USD to CAD lost upside momentum and is trying to settle below the nearest support level at the 20 EMA at 1.2670. If this attempt is successful, it will head towards the next support level which is located at 1.2625. A move below the support at 1.2625 will push USD to CAD towards the next support at 1.2590.

On the upside, USD to CAD needs to stay above the 20 EMA to have a chance to gain upside momentum in the near term. The next resistance level is located at 1.2700.

In case USD to CAD gets above this level, it will head towards the 50 EMA at 1.2715. A move above the 50 EMA will push USD to CAD towards the resistance at 1.2750. If USD to CAD settles above this level, it will move towards the resistance at 1.2775.

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