USD/CAD Daily Forecast – U.S. Dollar Attempts To Rebound

USD/CAD Video 09.06.20.

U.S. Dollar Made Its First Serious Rebound Attempt In Many Days

Finally, USD/CAD made a material rebound attempt. After USD/CAD managed to settle above 1.3400, it gained material upside momentum and headed towards the next resistance near 1.3500. However, USD/CAD faced significant resistance at 1.3500, lost momentum and pulled back below 1.3450.

There are several catalysts behind this move. First, global risk appetite decreased today as traders started to take profits after the major rally in riskier assets. Second, oil found itself under some pressure.

However, the risk-off move in the world market was not too significant. In fact, the U.S. dollar, which has earlier tried to rebound, is declining against a broad basket of currencies.

The U.S. Dollar Index made an attempt to settle in the range between 96.5 and 97 but has recently made a downside breakout and is heading towards the 96 level. This is a bearish development for USD/CAD.

Tomorrow, USD/CAD trading dynamics will be influenced by the U.S. Fed Interest Rate decision. While the rate is expected to stay unchanged, the market will closely watch the comments by the Fed Chair Jerome Powell, searching for indications of the amount of monetary stimulus that the Fed is prepared to provide to economy and markets.

Technical Analysis

USD/CAD gained upside momentum above 1.3400 but faced significant resistance near 1.3500. Now, USD/CAD will need to stay above 1.3400 in order to get a second chance to test the nearest resistance level.

In case USD/CAD manages to settle above 1.3500, it will likely gain additional upside momentum and head towards the next resistance level at 1.3570.

A move above 1.3570 will open the way to the following resistance at the 20 EMA at 1.3660. Such a move would mark the end of the current downside trend, and USD/CAD will have a solid chance to develop significant upside momentum.

On the support side, the nearest support for USD/CAD is located at the recent lows at 1.3360. In case USD/CAD gets below this support level, it will continue the current downside move and head towards the support at 1.3210.

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