USD/CAD Daily Forecast – U.S. Dollar Moves Higher As Treasury Yields Rebound

Canadian Dollar Remains Under Pressure Amid Weakness In Commodity Markets

USD/CAD continues its attempts to settle above the resistance at 1.2550 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently gained strong upside momentum and is currently trying to settle above the resistance at the 20 EMA at 92.30. In case this attempt is successful, the U.S. Dollar Index will move towards 92.50 which will be bullish for USD/CAD.

Today, U.S. released ADP Employment Change report which indicated that private businesses created just 330,000 jobs in July compared to analyst consensus of 695,000. U.S. Services PMI report was a bit better than expected as Services PMI declined from 64.6 in June to 59.9 in July compared to analyst consensus of 59.8.

Foreign exchange market traders also focused on the recent volatility in U.S. government bond markets. The yield of 10-year Treasuries made an attempt to settle below 1.13% but lost momentum and rebounded towards 1.20% which was bullish for the American currency.

Meanwhile, WTI oil continued to move lower on virus worries, which was bearish for commodity-related currencies, including Canadian dollar.

Technical Analysis

The technical picture for USD to CAD has not changed much compared to the previous trading session. USD to CAD is trying to settle above the nearest resistance level at 1.2550. If USD to CAD manages to settle above this level, it will move towards the resistance at 1.2590.

A move above 1.2590 will push USD to CAD towards the resistance at 1.2625. In case USD to CAD gets above 1.2625, it will head towards the resistance at 1.2650.

On the support side, the nearest support level for USD to CAD is located at the 20 EMA at 1.2520. A move below the support at 1.2520 will open the way to the test of the support at 1.2500. In case USD to CAD manages to settle below 1.2500, it will head towards the next support level which is located at 1.2480.

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