USD/CAD Daily Forecast – Canadian Dollar Declines As Commodities Move Lower
Canadian Dollar Is Under Pressure Against U.S. Dollar
USD/CAD is currently trying to settle above the resistance at the 50 EMA at 1.2200 while the U.S. dollar is mostly flat against a broad basket of currencies.
The U.S. Dollar Index continues its attempts to settle above the resistance at the 50 EMA at 90.60. If the U.S. Dollar Index gets above this level, it will head towards the resistance at 90.90 which will be bullish for USD/CAD.
Today, foreign exchange market traders focused on the economic data from the U.S. Retail Sales declined by 1.3% month-over-month in May compared to analyst consensus which called for a decline of 0.8%. Industrial Production increased by 0.8% month-over-month in May compared to analyst consensus of 0.6%, while Manufacturing Production grew by 0.9%.
Producer Prices data exceeded expectations in both U.S. and Canada, but it looks that these reports had little impact on currency dynamics as traders remained focused on Fed Interest Rate Decision and the subsequent commentary which will be released on Wednesday.
Meanwhile, Canadian dollar found itself under pressure together with other commodity-related currencies due to the sell-off in commodity markets. Oil moved higher today, but the sell-off in commodities like copper was too strong, so traders ignored positive developments in oil markets.
USD to CAD managed to settle above the resistance at 1.2170 and is trying to settle above the next resistance level which is located at the 50 EMA at 1.2200.
In case USD to CAD gets above this level, it will head towards the next resistance at 1.2250. A successful test of the resistance at 1.2250 will push USD to CAD towards the next resistance at 1.2270. In case USD to CAD settles above 1.2270, it will head towards the resistance at 1.2300.
On the support side, the previous resistance level at 1.2170 will serve as the first support level for USD to CAD. A move below this level will push USD to CAD towards the next support at 1.2130. The 20 EMA is located in the nearby so USD to CAD will likely get material support near 1.2130.
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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