USD/CAD Daily Forecast – Test Of Support At 1.2740

Canadian Dollar Rebounds After Yesterday’s Sell-Off

USD/CAD is currently trying to settle below the support at 1.2740 while the U.S. dollar continues to gain ground against a broad basket of currencies.

The U.S. Dollar Index is trying to get above the resistance at 93.10. In case this attempt is successful, the U.S. Dollar Index will move towards the next resistance at 93.30 which will be bullish for USD/CAD.

Today, foreign exchange market traders had a chance to take a look at housing market data from U.S. Building Permits declined by 5.1% month-over-month in June while Housing Starts grew by 6.3%.

Tomorrow, traders will focus on Canada’s New Housing Price Index for June which is projected to grow by 11.3% on year-over-year basis.

Traders will also keep an eye on the developments in commodity markets as the recent sell-off in commodities put significant pressure on commodity-related currencies, including Canadian dollar. Today, commodity markets are moving higher despite fears about a new wave of coronavirus caused by the more infectious Delta variant, which is bullish for the Canadian dollar.

Technical Analysis

USD to CAD managed to settle below the support at 1.2765 and is trying to settle below the next support level which is located at 1.2740. If this attempt is successful, USD to CAD will move towards the next support at 1.2710.

A move below the support at 1.2710 will open the way to the test of the support at 1.2685. In case USD to CAD declines below the support at 1.2685, it will move towards the next support level at 1.2650.

On the upside, the previous support level at 1.2765 will serve as the first resistance level for USD to CAD. In case USD to CAD manages to settle above this level, it will head towards the next resistance which is located at the recent highs near 1.2800. A successful test of this level will push USD to CAD towards the next resistance level at 1.2835.

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