USD/CAD Daily Forecast – Stuck Between Support At 1.3500 And 20 EMA
USD/CAD Video 17.07.20.
Canadian Dollar Fails To Gain Upside Momentum As Oil Continues To Trade Near The $40 Level
USD/CAD has once again failed to get out of the range between the support level at 1.3500 and the resistance level at the 20 EMA at 1.3580.
The U.S. dollar is losing ground against a broad basket of currencies, and the U.S. Dollar Index continues its attempts to settle below the 96 level. If these attempts are successful, the U.S. dollar may gain downside momentum which will be bearish for USD/CAD.
Today, the U.S. has reported that Building Permits have increased by 2.1% month-over-month in June. Meanwhile, Housing Starts grew by 17.3%. The economic data continues to point to a solid economic rebound in June.
However, the picture may be not as optimistic in July. The preliminary Michigan Consumer Sentiment report for July showed that consumer sentiment decreased from 78.1 in June to 73.2 in July. Analysts expected that it will grow to 79.
Most likely, the coninued surge in the number of new coronavirus cases hurt consumer sentiment. This is a problem for a consumer-dependent economy like U.S.
However, the U.S. dollar, which has served as a safe haven asset of last resort during the current crisis, did not receive much support after the release of Michigan Consumer Sentiment report. It looks like safe haven buying is currently concentrated in gold which continues to trade near yearly highs.
Meanwhile, Canadian dollar fails to develop momentum as oil stays glued to the $40 – $41 range and does not provide additional support to commodity-related currencies.
The technical picture for USD to CAD has not changed much during the recent trading sessions.
USD to CAD has strong support at 1.3500 which has already been tested many times. A move below this support level will be very dangerous for USD to CAD bulls as it can easily lead to a sell-off which could take USD to CAD closer to the next support level at 1.3440.
On the upside, USD to CAD needs to settle above the 20 EMA at 1.3580 to gain more upside momentum and head towards the test of the 50 EMA level at 1.3645.
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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