USD/CAD Daily Forecast – U.S. Dollar Is Under Strong Pressure

Canadian Dollar Rebounds Ahead Of The Weekend

USD/CAD is currently testing the support at 1.2350 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 92.40. In case this test is successful, the U.S. Dollar Index will move towards the next support at 92.15 which will be bearish for USD/CAD.

Today, U.S. released Non Farm Payrolls report which indicated that U.S. economy added 850,000 jobs in June compared to analyst consensus of 700,000. Meanwhile, Unemployment Rate increased from 5.8% in May to 5.9% in June compared to analyst consensus of 5.7%.

Foreign exchange market traders also had a chance to take a look at Factory Orders report which indicated that Factory Orders increased by 1.7% month-over-month in May compared to analyst consensus of 1.6%.

I’d note that Treasury yields continued to move lower after the release of these reports, and it looks that lower yields have put some pressure on the American currency.

Technical Analysis

USD to CAD failed to settle above the resistance at 1.2450 and gained strong downside momentum. It has recently managed to settle below the support at 1.2385 and is trying to settle below the next support level at 1.2350.

In case this attempt is successful, USD to CAD will move towards the next support at 1.2325. A successful test of this level will open the way to the test of the support which is located at the 20 EMA at 1.2310. If USD to CAD declines below the 20 EMA, it will get to the test of the support at 1.2300.

On the upside, the nearest resistance level for USD to CAD is located at 1.2385. If USD to CAD manages to settle above this level, it will head towards the next resistance level which is located at 1.2420. A move above this level will push USD to CAD towards the resistance at the recent highs at 1.2450.

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