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USD/CAD Daily Forecast – U.S. Dollar Tries To Rebound Against Canadian Dollar

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USD/CAD Video 18.05.21.

U.S. Dollar Attempts To Gain Ground Against Canadian Dollar

USD/CAD has recently made an attempt to settle below the support at 1.2040 but lost momentum and rebounded above 1.2065 while the U.S. dollar remained under pressure against a broad basket of currencies.

The U.S. Dollar Index managed to settle below the support at 90 and made an attempt to settle below the next support level at 80.75. This attempt was not successful, and the U.S. Dollar Index moved closer to the 90 level. If the U.S. Dollar Index manages to get back above the 90 level, USD/CAD will get more support.

Today, U.S. reported that Building Permits increased by 0.3% month-over-month in April compared to analyst consensus which called for a decline of 0.9%. Housing Starts declined by 9.5% month-over-month compared to analyst consensus which called for a decline of 2.8%. While Housing Starts declined more than expected, the housing market remains at strong levels, and it’s too early to make conclusions after one disappointing report.

Tomorrow, foreign exchange market traders will focus on inflation data from Canada. Inflation Rate is projected to increase by 3.2% in April on a year-over-year basis. Core Inflation Rate is expected to increase by 2.1%.

Technical Analysis

USD to CAD failed to settle below the support at 1.2040 and moved towards the resistance at 1.2080. In case USD to CAD manages to settle above this level, it will head towards the next resistance at 1.2100.

A successful test of the resistance at 1.2100 will open the way to the test of the resistance at 1.2130. If USD to CAD gets above 1.2130, it will move towards the resistance at 1.2170.

On the support side, the nearest support level for USD to CAD is located at 1.2065. If USD to CAD declines below this level, it will get to another test of the support at 1.2040. A move below the support at 1.2040 will push USD to CAD towards the next support level which is located at 1.2000.

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

This article was originally posted on FX Empire

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