USD/CAD Daily Forecast – Test Of Support At 1.2730

U.S. Dollar Is Losing Ground Against Canadian Dollar

USD/CAD is currently trying to settle below the support at 1.2730 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has recently declined towards the support level at 93.10. A move below this level will push the U.S. Dollar Index towards the next support at 92.80.

Today, foreign exchange market traders will focus on Fed Interest Rate Decision and the subsequent commentary. Fed Chair Jerome Powell will provide the latest updates on the fate of Fed’s asset purchase program, which will have a significant impact on markets. Volatility will likely increase when Powell begins to speak, and traders should be prepared for fast moves.

Meanwhile, commodity-related currencies are gaining ground as commodity markets are moving higher. WTI oil managed to settle back above the $71 level and is trying to get above the $72 level. In case this attempt is successful, it will move towards the resistance at $72.50 which will be bullish for Canadian dollar.

Technical Analysis

USD to CAD managed to get below the support at 1.2760 and is testing the next support level at 1.2730. A successful test of this level will open the way to the test of the next support at 1.2710.

If USD to CAD declines below the support at 1.2710, it will head towards the next support which is located at the 20 EMA near 1.2690. A move below the 20 EMA will open the way to the test of the support level at 1.2650.

On the upside, the previous support at 1.2760 will serve as the first resistance level for USD to CAD. In case USD to CAD manages to get back above this level, it will head towards the resistance at 1.2785. A successful test of the resistance at 1.2785 will push USD to CAD towards the next resistance level which is located near today’s highs at 1.2830.

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