USD/CAD Daily Forecast – U.S. Dollar Is Under Pressure After Yesterday’s Upside Move

USD/CAD Video 08.04.21.

Canadian Dollar Rebounds Against U.S. Dollar

USD/CAD failed to settle above the resistance at the 50 EMA at 1.2605 and declined below the support at 1.2590 while U.S. dollar lost ground against a broad basket of currencies.

The U.S. Dollar Index managed to settle below the support at the 20 EMA at 92.35 and is currently trying to settle below the next support at 92.15. A successful test of this level will push the U.S. Dollar Index towards the 92 level which will be bearish for USD/CAD.

Today, the U.S.  reported that Initial Jobless Claims increased from 728,000 (revised from 719,000) to 744,000 compared to analyst consensus of 680,000. Continuing Jobless Claims declined from 3.75 million (revised from 3.79 million ) to 3.73 million compared to analyst consensus of 3.65 million.

The reports were weaker than expected but foreign exchange market traders remained focused on dovish FOMC Minutes which were released on Wednesday. Treasury yields continued to move lower which was bearish for the American currency. If the current pullback in Treasury yields continues, USD/CAD will find itself under more pressure.

Technical Analysis

USD to CAD did not manage to settle above the resistance at the 50 EMA at 1.2605 and is trying to settle below the nearest support level at 1.2590. In case this attempt is successful, USD to CAD will head towards the next support level which is located at the 20 EMA at 1.2570.

If USD to CAD manages to settle below the 20 EMA at 1.2570, it will continue its downside move and head towards the support at 1.2550. A successful test of the support at 1.2550 will open the way to the test of the next support level at 1.2525.

On the upside, the nearest resistance level for USD to CAD is located at the 50 EMA at 1.2605. If USD to CAD gets above the 50 EMA, it will move towards the resistance at 1.2625. A move above this level will push USD to CAD towards the next resistance which is located at 1.2665.

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