USD/CAD Daily Forecast – Canadian Dollar Is Strong Ahead Of The Weekend
USD/CAD Video 12.03.21.
Strong Employment Reports From Canada Provide Support To Canadian Dollar
USD/CAD gained strong downside momentum and is trying to settle below the support at 1.2470 while the U.S. dollar is gaining ground against a broad basket of currencies.
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The U.S. Dollar Index has recently made an attempt to settle above the resistance at the 92 level but failed to develop sufficient upside momentum and pulled back below 91.75. The nearest support level for the U.S. Dollar Index is located at 91.50. In case the U.S. Dollar Index declines below this level, it will head towards the support at 91.30 which will be bearish for USD/CAD.
Today, Canada provided Employment Change report which indicated that Canadian economy added 259,200 jobs in February compared to analyst consensus which projected that the economy would add just 75,000 jobs. As a result, Unemployment Rate decreased from 9.4% in January to 8.2% in February. Strong economic data provided additional support to Canadian dollar which developed additional upside momentum against U.S. dollar.
In the U.S., Consumer Confidence increased from 76.8 in February to 83 in March compared to analyst consensus of 78.5. Strong Consumer Confidence report may provide additional support to Treasury yields which have recently tested multi-month highs on worries about higher inflation.
At the same time, it should be noted that higher Treasury yields failed to provide support to USD/CAD as traders focused on positive economic data from Canada.
Technical Analysis
USD to CAD is currently testing the support at the yearly lows at 1.2470. If this test is successful, USD to CAD will head towards the next support level which is located at 1.2450.
It should be noted that USD to CAD has not visited this territory for several years so it remains to be seen whether previous levels will be relevant for today’s trading. A move below the support at 1.2450 will push USD to CAD towards the next support level at 1.2415.
On the upside, USD to CAD needs to stay above 1.2470 to have a chance to develop upside momentum in the near term. The next resistance level is located at 1.2500. In case USD to CAD manages to settle above this level, it will head towards the next resistance at 1.2525.
For a look at all of today’s economic events, check out our economic calendar.