USD/CAD Daily Forecast – U.S. Dollar Retreats Ahead Of The Weekend

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Updated: Jun 4, 2021, 16:47 UTC

USD/CAD is testing the support level at 1.2080.

USD/CAD Daily Forecast – U.S. Dollar Retreats Ahead Of The Weekend

U.S. Dollar Moves Lower After Weak Non Farm Payrolls Report

USD/CAD is currently trying to settle below the support at 1.2080 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get below the 20 EMA at 90.20 and is currently trying to settle below the next support level at 90. A move below this level will push the U.S. Dollar Index towards the support at 89.75 which will be bearish for USD/CAD.

Today, the U.S. released Non Farm Payrolls report which indicated that the U.S. economy added 559,000 jobs in May compared to analyst consensus of 650,000. Market expectations were high after strong ADP Employment Change report, which was released on Thursday. ADP Employment Change report showed that private businesses added 978,000 jobs in May.

Non Farm Payrolls report is viewed as a more accurate indicator of the current situation in the job market, so it’s not surprising to see that the U.S. dollar gained strong downside momentum after the release of weak report. Foreign exchange market traders bet that the Fed will keep its current support intact for many months, which is bearish for the U.S. dollar and bullish for riskier currencies.

Technical Analysis

USD to CAD managed to get below the support at the 20 EMA at 1.2100 and is trying to settle below the next support at 1.2080. If this attempt is successful, USD to CAD will head towards the support at 1.2065.

A move below this level will open the way to the test of the support at 1.2040. If USD to CAD settles below this level, it will move towards the next support at 1.2000.

On the upside, USD to CAD needs to settle above the 20 EMA to have a chance to gain upside momentum in the near term. The next resistance level for USD to CAD is located at 1.2130. If USD to CAD manages to settle above this level, it will head towards the resistance at 1.2170.

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

About the Author

Vladimir Zernovauthor

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.