USD/CAD Daily Forecast – Test Of Support At 1.2385

U.S. Dollar Is Losing Ground Against Canadian Dollar

USD/CAD is currently trying to settle below the support at 1.2385 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get below the support at the 92 level and is trying to develop additional downside momentum. In case this attempt is successful, it will get to the test of the next support at 91.80 which will be bearish 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 will focus on general market sentiment and commodity markets.

Commodity-related currencies are moving higher today as WTI oil managed to get to new highs while copper began to rebound after the recent sell-off. If commodities continue to move higher, Canadian dollar will get more support.

Traders will also continue to monitor the developments in U.S. government bond markets. It’s been a volatile day for bond traders, and the yield of 10-year Treasuries moved towards 1.49% after an unsuccessful attempt to settle below 1.36%. Higher yields are often bullish for the U.S. dollar, but it looks that American currency is under pressure today because traders take profits after the recent strong rally.

Technical Analysis

USD to CAD managed to settle below the support at 1.2420 and is testing the next support level at 1.2385. In case this test is successful, USD to CAD will move towards the next support level at 1.2350.

If USD to CAD declines below the support at 1.2350, it will head towards the support at 1.2325. If USD to CAD manages to settle below this level, it will move towards the support level at 1.2300.

On the upside, USD to CAD needs to settle back above 1.2385 to have a chance to develop upside momentum in the near term. If USD to CAD settles above 1.2385, it will head towards the resistance at 1.2420. A successful test of this level will open the way to the test of the next resistance at 1.2450.

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