USD/CAD Daily Forecast – Canadian Dollar Is Flat After BoC Interest Rate Decision
USD/CAD Video 09.06.21.
USD/CAD Remains Stuck Near 1.2100
USD/CAD continues its attempts to settle above the resistance at the 20 EMA at 1.2100 while the U.S. dollar is mostly flat against a broad basket of currencies.
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The U.S. Dollar Index has recently made an attempt to settle below the support at the 90 level but lost momentum and moved back above 90. The nearest resistance level for the U.S. Dollar Index is located at the 20 EMA at 90.20. In case the U.S. Dollar Index gets above this level, it will gain additional upside momentum which will be bullish for USD/CAD.
Today, foreign exchange market traders focused on Bank of Canada’s Interest Rate Decision. BoC left the interest rate unchanged at 0.25% and stated that it would hold the rate at the current level until inflation objective was sustainably achieved. Bank of Canada targets inflation of 2%. The current quantitive easing program was also left unchanged.
Tomorrow, traders will focus on the ultra-important U.S. inflation data which will likely have a very serious impact on currency dynamics. Recent trading sessions have shown that traders were not ready to make big moves ahead of the release of U.S. inflation data, and I’d expect increased volatility on Thursday.
Technical Analysis
The technical picture for USD to CAD has not changed in recent trading sessions. If USD to CAD settles above the 20 EMA at 1.2100, it will move towards the resistance at 1.2130.
A successful test of the resistance at 1.2130 will open the way to the test of the next resistance at 1.2170. If USD to CAD gets above this level, it will move towards the resistance which is located at 1.2200.
On the support side, the nearest support level for USD to CAD is located at 1.2080. If USD to CAD manages to get back below this level, it will move towards the support at 1.2065. A move below the support at 1.2065 will push USD to CAD towards the support at 1.2040.
For a look at all of today’s economic events, check out our economic calendar.