USD/CAD Daily Forecast – Test Of Resistance At 1.2500

Canadian Dollar Is Losing Ground Against U.S. Dollar

USD/CAD is trying to get back above 1.2500 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index is currently moving towards the resistance level at 92. If the U.S. Dollar Index manages to get above this level, it will head towards the next resistance at 92.25 which will be bullish for USD/CAD.

Today, U.S. reported that NY Empire State Manufacturing Index increased from 12.1 in February to 17.4 in March. Meanwhile, Canada reported that Housing Starts totaled 245,900 in February, mostly in line with the analyst consensus.

Treasury yields pulled back from recent highs, but this pullback did not put any pressure on the U.S. dollar which continued to move higher against a broad basket of currencies.

WTI oil pulled back below the $65 level which was bearish for commodity-related currencies including Canadian dollar. If the current pullback continues, Canadian dollar may find itself under more pressure.

Technical Analysis

USD to CAD failed to settle below the support level at 1.2470 and made an attempt to settle above the resistance at 1.2500. RSI remains close to the oversold territory so there is plenty of room to gain upside momentum in case the right catalysts emerge.

If USD to CAD manages to settle above the resistance at 1.2500, it will head towards the next resistance level at 1.2525. A move above this level will push USD to CAD towards the resistance at 1.2550. In case USD to CAD gets above the resistance at 1.2550, it will head towards the next resistance at 1.2590.

On the support side, the nearest support level for USD to CAD is located at 1.2470. In case USD to CAD declines below this level, it will head towards the next support at 1.2450. If USD to CAD manages to settle below the support at 1.2450, it will gain additional downside momentum and head towards the support level which is located at 1.2415.