USD/CAD Daily Forecast – Support At 1.2500 Stays Strong
U.S. Dollar Moves Higher Against Canadian Dollar
USD/CAD is currently trying to get back above the 20 EMA at 1.2525 while the U.S. dollar is moving higher against a broad basket of currencies.
The U.S. Dollar Index has recently made an attempt to settle back above the 93 level but this attempt yielded no results. In case the U.S. Dollar Index manages to settle above this level, it will get to the test of the resistance at 93.10 which will be bullish for USD/CAD.
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Today, foreign exchange market traders had a chance to take a look at the latest job market data from U.S. Initial Jobless Claims declined from 387,000 (revised from 385,000) to 375,000, in line with the analyst consensus. Continuing Jobless Claims decreased from 2.98 million (revised from 2.93 million) to 2.87 million compared to analyst consensus of 2.88 million.
Meanwhile, Treasury yields moved higher after U.S. Producer Prices report indicated that Producer Prices increased by 7.8% year-over-year in July compared to analyst consensus of 7.3%. Traders should continue to monitor the developments in U.S. government bond markets as strong moves in Treasury yields will certainly have an impact on USD/CAD dynamics.
Technical Analysis
USD to CAD did not manage to settle below the support level at 1.2500 and rebounded towards the resistance at the 20 EMA at 1.2525. In case USD to CAD manages to settle above this level, it will head towards the resistance at 1.2550.
A move above 1.2550 will open the way to the test of the major resistance at 1.2590. This resistance level has already been tested many times and proved its strength. In case USD to CAD manages to settle above 1.2590, it will move towards the resistance at 1.2625.
On the support side, a move below the support at 1.2500 will push USD to CAD towards the support at 1.2480. If USD to CAD declines below this level, it will get to the test of the 50 EMA at 1.2470. A successful test of the support at the 50 EMA will open the way to the test of the next support at 1.2450.
For a look at all of today’s economic events, check out our economic calendar.