USD/CAD Daily Forecast – U.S. Dollar Rebounds After Recent Pullback

Canadian Dollar Is Losing Ground Against U.S. Dollar

USD/CAD is currently trying to settle above the resistance at 1.2590 while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to settle below the support at 92.80 but failed to develop sufficient downside momentum and moved back above 92.80. In case the U.S. Dollar Index manages to move above the 93 level, it will get to the test of the resistance at 93.10 which will be bullish for USD/CAD.

Today, U.S. reported that Initial Jobless Claims increased from 368,000 (revised from 360,000) to 419,000 compared to analyst consensus which expected that Initial Jobless Claims would decline to 350,000. Meanwhile, Continuing Jobless Claims decreased from 3.27 million (revised from 3.24 million) to 3.24 million compared to analyst estimate of 3.1 million.

Existing Home Sales report showed that Existing Home Sales grew by 1.4% month-over-month in June while analysts expected growth of 0.9%.

It should be noted that WTI oil continued to move higher which was bullish for commodity-related currencies, but this move did not provide enough support to Canadian dollar.

Technical Analysis

USD to CAD managed to settle above 1.2560 and is trying to settle above the next resistance at 1.2590. In case this attempt is successful, it will move towards the next resistance level which is located at 1.2625. RSI has pulled back into the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

A move above the resistance at 1.2625 will open the way to the test of the resistance at 1.2650. In case USD to CAD gets above this level, it will head towards the next resistance at 1.2685.

On the support side, the nearest support level for USD to CAD is located at 1.2560. If USD to CAD declines below this level, it will head towards the support at 1.2540. A move below this level will open the way to the test of the support at the 20 EMA at 1.2520.

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