USD/CAD Daily Forecast – U.S. Dollar Rallies As Jobs Reports Exceed Expectations

Canadian Dollar Is Under Pressure

USD/CAD is moving towards the resistance level at 1.2590 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index gained strong upside momentum and is testing the resistance level at 92.80. In case this test is successful, the U.S. Dollar Index will move towards the next resistance at 93.10 which will be bullish for USD/CAD.

Today, Non Farm Payrolls report indicated that U.S. economy added 943,000 jobs in July, exceeding analyst expectations of 870,000. The report provided strong support to the American currency.

Treasury yields increased as traders bet that Fed will have to cut its asset purchase program. Currently, the yield of 10-year Treasuries is trying to settle above 1.30%. In case this attempt is successful, it will head towards the 50 EMA at 1.3650% which will be bullish for the U.S. dollar.

Meanwhile, WTI oil lost momentum after it failed to settle above the $70 level. Currently, WTI oil is trying to settle below the support at the $68 level. In case this attempt is successful, WTI oil will gain additional downside momentum which will be bearish for Canadian dollar.

Technical Analysis

USD to CAD managed to get above the resistance at 1.2550 and is trying to get to the test of the next resistance level which is located at 1.2590.

In case USD to CAD manages to settle above this level, it will gain additional upside momentum and move towards the resistance at 1.2625. A successful test of the resistance at 1.2625 will open the way to the test of the next resistance at 1.2650.

On the support side, the previous resistance level at 1.2550 will serve as the first support level for USD to CAD. A move below this level will push USD to CAD towards the support which is located at the 20 EMA near 1.2525.

In case USD to CAD declines below the 20 EMA, it will move towards the support at 1.2500. A successful test of this support level will push USD to CAD towards the support at 1.2480.

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