USD/CAD Daily Forecast – Test Of Support At 1.2450

USD/CAD Video 16.03.21.

U.S. Dollar Is Losing Ground Against Canadian Dollar

USD/CAD is currently testing the support at 1.2450 while the U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to settle above the resistance at 92 but failed to develop sufficient upside momentum and pulled back. As a result, the U.S. Dollar Index remains in the range between the support at 91.75 and the resistance at 92. If the U.S. Dollar Index settles above the resistance at 92, it will head towards the next resistance level at 92.25 which will be bullish for USD/CAD.

Today, U.S. reported that Retail Sales declined by 3% month-over-month in February compared to analyst consensus which called for a decrease of 0.5%. At the same time, the previous report was substantially revised to the upside.

U.S. has also reported that Industrial Production decreased by 2.2% month-over-month in February while Manufacturing Production declined by 3.1%. Both reports were below analyst expectations.

Meanwhile, foreign exchange market traders will continue to wait for the main event of the week. The Fed will announce its Interest Rate Decision and provide commentary on Wednesday. Volatility may decrease ahead of Fed decision but trading action will get a boost right after the commentary is released.

Technical Analysis

USD to CAD managed to settle below the support at 1.2470 and is trying to settle below the next support level at 1.2450.

If this attempt is successful, USD to CAD will head towards the next support at 1.2415. A move below the support at 1.2415 will open the way to the test of the support at 1.2400.

On the upside, the previous support at 1.2470 will serve as the first resistance level for USD to CAD. If USD to CAD manages to settle above this level, it will head towards the next resistance at 1.2500. A move above the resistance at 1.2500 will push USD to CAD towards the resistance at 1.2525.

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