USD/CAD Daily Forecast – U.S. Dollar Tries To Rebound
USD/CAD Video 07.07.20.
U.S. Dollar Attempts To Get Back Above The 20 EMA
USD/CAD made an attempt to get above the 20 EMA at 1.3595 but failed to develop additional upside momentum.
The U.S. dollar is flat against a broad basket of currencies, and the attempt of the U.S. Dollar Index to get above the resistance level at 97 was unsuccessful.
Canada has released Ivey PMI data for June which showed that PMI increased from 39.1 in May to 58.2 in June. This means that Canadian purchasing activity has significantly increased.
However, favorable PMI data failed to boost the Canadian dollar. In addition, oil continues to struggle to gain more upside momentum above the $40 level. A material move above this level will be bullish for commodity-related currencies including the Canadian dollar.
The continued spread of coronavirus provides some support to the U.S. dollar which has served as a safe haven asset of last resort during the current crisis. Recently, Melbourne was forced to impose a six-week lockdown to contain the spread of the disease. If new lockdowns become widespread, the American currency may get more support.
USD/CAD tried to get above the the nearest resistance level at the 20 EMA at 1.3595 but this attempt was not successful. As a result, USD/CAD continues to trade in the range between the support level at 1.3500 and the resistance level at 1.3595.
RSI is at moderate levels so USD/CAD has plenty of room to develop momentum in either direction.
In case USD/CAD settles above the resistance at the 20 EMA at 1.3595, it will likely get a boost and head towards the next resistance level at the 50 EMA at 1.3670.
On the support side, a move below the support level at 1.3500 will lead to increased downside momentum and take USD/CAD closer to the next support level at 1.3440.
At this point, the support at 1.3500 looks strong, and USD/CAD will likely need significant catalysts to get below this level. In addition, a move below 1.3500 will signal a return to the previous downside trend so there’ll be a lot of interest at this level if USD/CAD gets to the serious test of 1.3500.
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