USD/CAD Daily Forecast – U.S. Dollar Declines After Disappointing Consumer Confidence Data

USD/CAD Video 14.05.21.

Canadian Dollar Gains Ground Ahead Of The Weekend

USD/CAD is currently trying to settle back below the support at 1.2100 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index is testing the support level at 90.30. In case this test is successful, the U.S. Dollar Index will head towards the next support level at the recent lows at 90 which will be bearish for USD/CAD.

Today, the U.S. reported that Retail Sales remained unchanged in April after growing by 10.7% month-over-month in March. Excluding Autos, Retail Sales declined by 0.8%.

Industrial Production increased by 0.7% month-over-month in April compared to analyst consensus which called for growth of 1%. Manufacturing Production grew by 0.4%, in line with analyst estimates.

Foreign exchange market traders also had a chance to take a look at preliminary Consumer Confidence data for May. The report was much worse than analyst estimates as Consumer Confidence dropped from 88.3 in April to 82.8 in May compared to analyst consensus of 90.4.

It should be noted that Inflation Expectations increased from 3.4% in April to 4.6% in May which may have put additional pressure on Consumer Confidence.

Technical Analysis

USD to CAD settled below the support at 1.2130 and made an attempt to settle below the next support level at 1.2100. If USD to CAD settles below this level, it will get to another test of the support at 1.2080.

A successful test of the support at 1.2080 will open the way to the test of the support at 1.2065. In case USD to CAD declines below this level, it will move towards the support at 1.2040. A move below 1.2040 will open the way to the test of the support at 1.2000.

On the upside, USD to CAD needs to get back above 1.2130 to have a chance to develop upside momentum in the near term. The next resistance level is located at 1.2170. If USD to CAD settles above this level, it will move towards the next resistance at 1.2200.

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