USD/CAD Daily Forecast – Canadian Dollar Stays Strong Against U.S. Dollar

·2 min read

USD/CAD Video 17.05.21.

U.S. Dollar Is Under Pressure At The Beginning Of The Week

USD/CAD is trying to settle below the support at 1.2080 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get below the support at 90.30 and is moving lower. The next support level for the U.S. Dollar Index is located at the 90 level. In case the U.S. Dollar Index gets to the test of this level, USD/CAD will find itself under more pressure.

Today, the U.S. reported that NY Empire State Manufacturing Index declined from 26.3 in April to 24.3 in May. Analysts expected that NY Empire State Manufacturing Index will decline to 23.9.

In Canada, Housing Starts totaled 268,600 in April compared to analyst consensus of 280,000. Housing Starts data from the U.S. will be released tomorrow and is projected to show that Housing Starts declined by 2.8% month-over-month in April after growing by 19.4% in March. Building Permits are expected to decline by 0.9%.

Foreign exchange market traders will pay attention to housing data as it will show how the housing market reacts to recent increases in commodity prices.

Technical Analysis

USD to CAD managed to settle below the support at 1.2100 and is testing the support at 1.2080. In case this test is successful, USD to CAD will move towards the next support level at 1.2065.

A move below the support at 1.2065 will push USD to CAD towards the next support at 1.2040. If USD to CAD declines below this level, it will head towards the support at 1.2000.

On the upside, the previous support at 1.2100 will likely serve as the first resistance level for USD to CAD. If USD to CAD moves above this level, it will head towards the resistance at 1.2130. This resistance level has been recently tested and proved its strength. A move above 1.2130 will open the way to the test of the resistance at 1.2170.

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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