USD/CAD Daily Forecast – Canadian Dollar Continues To Move Higher
USD/CAD Video 02.03.21.
U.S. Dollar Is Under Pressure Against Canadian Dollar
USD/CAD is currently testing the support level at 1.2625 while the U.S. dollar is losing ground against a broad basket of currencies.
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The U.S. Dollar Index gained strong downside momentum after an unsuccessful attempt to settle above the resistance at 91.30. Currently, the U.S. Dollar Index is trying to settle below the support at 90.90. If this attempt is successful, the U.S. Dollar Index will head towards the next support level which is located at the 50 EMA at 90.70 which will be bearish for USD/CAD.
Today, Canada reported that its GDP grew by 0.1% month-over-month in December compared to analyst consensus which called for growth of 0.3%. Fourth-quarter GDP Growth Rate was 2.3% on a quarter-over-quarter basis compared to analyst forecast which called for growth of 1.5%.
It should be noted that U.S. Treasury yields have mostly remained near yesterday’s levels, but the American dollar got hit by a wave of profit taking after the recent rally.
Technical Analysis
USD to CAD gained strong downside momentum and is currently trying to settle below the support at 1.2625. RSI remains in the moderate territory, and there is plenty of room to gain additional downside momentum in case the right catalysts emerge.
If USD to CAD settles below 1.2625, it will move towards the next support level which is located at 1.2590. A successful test of the support at 1.2590 will open the way to the test of the support at 1.2550. In case USD to CAD declines below the support at 1.2550, it will head towards the support at 1.2525.
On the upside, the nearest resistance level for USD to CAD is located at the 20 EMA at 1.2665. If USD to CAD manages to settle above the 20 EMA at 1.2665, it will head towards the next resistance level which is located at 1.2700. A move above this level will push USD to CAD towards the next resistance at the 50 EMA at 1.2720.
For a look at all of today’s economic events, check out our economic calendar.