USD/CAD Daily Forecast – U.S. Dollar Gains Ground Amid Demand For Safe Haven AssetsUSD/CAD gained upside momentum and made an attempt to settle above the 50 EMA.
USD/CAD Video 27.01.21.
U.S. Dollar Moves Higher Against Canadian Dollar
USD/CAD made an attempt to settle above the 50 EMA at 1.2800 but failed to develop sufficient momentum and rebounded closer towards the support level at 1.2775 while the U.S. dollar gained ground against a broad basket of currencies.
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The U.S. Dollar Index managed to settle above the resistance at 90.50 and tested the resistance at the 50 EMA at 90.80 amid increased demand for safe haven assets. If the U.S. Dollar Index manages to settle above the 50 EMA, it will gain additional upside momentum and head towards the resistance at 90.10 which will be bullish for USD/CAD.
Today, global markets found themselves under pressure after the release of disappointing economic data from Germany. Germany’s Business Confidence declined from 92.2 in December to 90.1 in January amid fears about the negative impact of the second wave of the virus. In addition, the German government revised its 2021 growth forecast from 4.4% to just 3% due to the second lockdown.
As a result, fears about the negative impact of lockdowns provided support to safe-haven assets like the U.S. dollar. The American currency showed strength before the Fed Interest Rate Decision which will be announced today, but it remains to be seen whether it will be able to sustain current momentum after the Fed’s commentary which is expected to be very dovish.
USD to CAD tried to settle above the resistance at the 50 EMA at 1.2800 but failed to develop sufficient upside momentum. In case USD to CAD settles above the 50 EMA, it will move towards the next resistance level at 1.2835.
A successful test of the resistance at 1.2835 will push USD to CAD towards the next resistance at 1.2860.
On the support side, the nearest support level for USD to CAD is located at 1.2775. In case USD to CAD declines below this level, it will head towards the next support at 1.2750. A move below this level will open the way to the test of the 20 EMA at 1.2730.
For a look at all of today’s economic events, check out our economic calendar.