USD/CAD Daily Forecast – Canadian Dollar Moves Lower As Demand For Riskier Currencies Declines

USD/CAD Video 04.05.21.

U.S. Dollar Gains Ground Against Canadian Dollar

USD/CAD is trying to settle above the resistance at 1.2310 while the U.S. Dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index is currently testing the resistance at the 20 EMA at 91.35. This resistance level has already been tested several times in recent trading sessions and proved its strength. In case the U.S. Dollar Index gets above this level, it will move towards the resistance at 91.50 which will be bullish for USD/CAD.

Today, the U.S. reported that Factory Orders increased by 1.1% month-over-month in March after declining by 0.5% in February (revised from -0.8%). Analysts expected that Factory Orders would increase by 1.3%.

Meanwhile, Canada reported that Building Permits grew by 5.7% month-over-month in March compared to analyst consensus which called for growth of 2%.

The reports had limited impact on USD/CAD as foreign exchange market traders focused on general market sentiment. Safe haven assets like U.S. dollar and U.S. Treasuries were in demand today while riskier currencies found themselves under pressure.

Technical Analysis

USD to CAD failed to settle below the support at 1.2280 and is trying to settle above the resistance level at 1.2310. USD to CAD has already managed to test the next resistance at 1.2350 but lost momentum and pulled back closer to 1.2310.

If USD to CAD manages to stay above 1.2310, it will have a chance to get to another test of the resistance at 1.2350. A move above this level will push USD to CAD towards the next resistance which is located at 1.2365.

In case USD to CAD gets above the resistance at 1.2365, it will head towards the resistance at 1.2385. A successful test of this level will open the way to the test of the resistance at 1.2400.

On the support side, a move below 1.2310 will push USD to CAD back towards the support at 1.2280. If USD to CAD settles below this level, it will gain additional downside momentum and head towards the next support at 1.2250.

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