USD/CAD Daily Forecast – Test Of Support At 1.2540
Canadian Dollar Gains Some Ground Against U.S. Dollar
USD/CAD is currently trying to settle below the support level at 1.2540 while the U.S. dollar is losing ground against a broad basket of currencies.
The U.S. Dollar Index is currently moving towards the support level which is located at the 20 EMA at 92.45. If the U.S. Dollar Index gets to the test of this level, USD/CAD will find itself under more pressure.
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Today, foreign exchange market traders had a chance to take a look at New Home Sales report from U.S. The report indicated that New Home Sales declined by 6.6% month-over-month in June after declining by 7.8% (revised from -5.9%) in May. Analysts expected that New Home Sales would grow by 3.5%.
While the U.S. dollar found itself under pressure against a broad basket of currencies today, USD/CAD failed to gain significant downside momentum as WTI oil pulled back, which was bearish for commodity-related currencies.
Technical Analysis
USD to CAD settled below the support level at 1.2560 and is trying to settle below the next support level at 1.2540. In case this attempt is successful, USD to CAD will get to another test of the next support level which is located at the 20 EMA at 1.2525.
A successful test of the support at the 20 EMA will open the way to the test of the next support level at 1.2500. In case USD to CAD declines below the support at 1.2500, it will head towards the next support level at 1.2480.
On the upside, USD to CAD needs to stay above 1.2540 to have a chance to develop upside momentum in the near term. The next resistance level for USD to CAD is located at 1.2560. If USD to CAD gets back above this level, it will move towards the resistance level which is located at today’s highs at 1.2590. A move above 1.2590 will open the way to the test of the next resistance at 1.2625.
For a look at all of today’s economic events, check out our economic calendar.