USD/CAD Daily Forecast – U.S. Dollar Rebounds After Recent Sell-Off

U.S. Dollar Gains Ground Against Canadian Dollar

USD/CAD is trying to settle above the resistance level at 1.2625 while the U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index failed to settle above the 93 level and remains in the range between the support at the 20 EMA at 92.85 and the 93 level. In case the U.S. Dollar Index manages to settle below the 20 EMA, it will head towards the 50 EMA at 92.40 which will be bearish for USD/CAD.

Today, U.S. reported that Durable Goods Orders declined by 0.1% month-over-month in July compared to analyst consensus which called for a decline of 0.3%.

This report did not have a material impact on USD/CAD as foreign exchange market traders remained focused on the upcoming Jackson Hole Symposium.

It should be noted that Treasury yields have started to move higher, but this move failed to provide material support to the U.S. dollar. Currently, the yield of 10-year Treasuries is trying to settle above the 50 EMA at 1.3350%. A move above this level will push the yield of 10-year Treasuries towards the resistance at the recent highs near 1.38% which may provide some support to the American currency, but it remains to be seen whether the market is ready for big moves ahead of the Jackson Hole Symposium.

Technical Analysis

USD to CAD is currently trying to get back above the resistance level at 1.2625. In case this attempt is successful, it will head towards the resistance at 1.2650.

A move above the resistance level at 1.2650 will open the way to the test of the next resistance at 1.2685. In case USD to CAD settles above this level, it will head towards the resistance at 1.2710.

On the support side, the nearest support level for USD to CAD is located at 1.2590. If USD to CAD settles below this level, it will move towards the support at 1.2550. A successful test of this level will lead to the test of the next support at the 50 EMA at 1.2540.

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