USD/CAD Daily Forecast – Canadian Dollar Gains Ground As Oil Continues To Rebound

U.S. Dollar Is Moving Lower Against Canadian Dollar

USD/CAD is currently trying to settle below the support at 1.2780 while U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index is testing the resistance level at 96.25. This resistance has already been tested several times and proved its strength. In case the U.S. Dollar Index settles above 96.25, it will head towards the next resistance at 96.50 which will be bullish for USD/CAD.

There are no important economic reports scheduled to be released in the U.S. and Canada today so foreign exchange market traders focus on the dynamics of commodity markets and the developments in U.S. government bond markets.

Treasury yields were moving higher today, providing support to the American currency. Meanwhile, WTI oil gained upside momentum and made an attempt to settle above $68.50 which was bullish for commodity-related currencies, including Canadian dollar. In case WTI oil manages to settle above this level, it will head towards the $70 level which will provide more support to the Canadian currency.

Technical Analysis

USD to CAD managed to settle below the support at 1.2800 and is testing the next support level at 1.2780. In case USD to CAD settles below this level, it will move towards the next support at 1.2760.

A move below the support at 1.2760 will open the way to the test of the support at 1.2730. If USD to CAD declines below 1.2730, it will head towards the support which is located at the 20 EMA at 1.2710.

On the upside, USD to CAD needs to get back above 1.2800 to have a chance to develop upside momentum in the near term. The next resistance level for USD to CAD is located at 1.2825.

In case USD to CAD gets above 1.2825, it will move towards the resistance level at 1.2850. A successful test of the resistance at 1.2850 will push USD to CAD towards the next resistance at 1.2890.

For a look at all of today’s economic events, check out our economic calendar.