USD/CAD Price Forecast – Canadian Dollar Is Mostly Flat Against U.S. Dollar

·2 min read

Key Insights

  • The U.S. Dollar Index keeps moving lower, which may put more pressure on USD/CAD. 

  • U.S. Pending Home Sales, which will be released soon, may serve as a catalyst for USD/CAD. 

  • A move above 1.2900 will push USD/CAD towards the resistance level at 1.2940.

Traders Wait For The U.S. Pending Home Sales Report

USD/CAD is currently trying to settle back above 1.2900 amid lack of strong catalysts.

The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, is currently testing the strong support level at 104. In case this test is successful, the U.S. Dollar Index will gain additional downside momentum, which will be bearish for USD/CAD.

The U.S. has released Durable Goods Orders report for May, which indicated that Durable Goods Orders increased by 0.7% month-over-month, compared to analyst consensus of 0.1%. The stronger-than-expected Durable Goods Orders report had little impact on the market.

Traders may pay more attention to the U.S. Pending Home Sales report, which will be released soon. Pending Home Sales are expected to decline by 3.7% month-over-month in May after falling by 3.9% in April. On a year-over-year basis, Pending Home Sales are projected to decrease by 10.6%. The housing market data is important as it shows the size of the blow dealt by higher interest rates.

USD/CAD Gets Strong Support Near The 20 EMA

USD/CAD received support near the 20 EMA at 1.2875 and is trying to settle back above 1.2900. In case this attempt is successful, USD/CAD will move towards the next resistance level at 1.2940.

A move above 1.2940 will open the way to the test of the resistance at 1.2970. If USD/CAD manages to settle above this level, it will head towards the next resistance at 1.3000.

On the support side, the nearest support level for USD/CAD is located at the 20 EMA. If USD/CAD declines below the 20 EMA, it will head towards the next support at 1.2830. A successful test of this level will push USD/CAD towards the support level at the 50 EMA at 1.2815.

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

This article was originally posted on FX Empire