Yahoo Finance USD/CAD Daily Forecast – Range-Bound Trading Continues
USD/CAD Video 03.07.20.
U.S. Dollar Fails To Develop Upside Momentum
USD/CAD is flat in quiet trading as the U.S. dollar lacks direction against a broad basket of currencies while oil stays glued to the $40 level.
The recent economic data has provided support to riskier currencies so USD/CAD has settled below the 20 EMA at 1.3610. At the same time, the rapid increase in the number of new coronavirus cases in the U.S. kept optimism in check and provided some support to the U.S. dollar.
As a result, the U.S. Dollar Index failed to get momentum and settled in the range between 97 and 97.5. Recently, it has made several attempts to settle above 97.5 and one serious attempt to get below 97, but each of these attempts failed due to lack of catalysts.
For now, the potential risks of additional virus containment measures are offset by optimism about the speed of economic recovery. If this balance is not changed in the near term, USD/CAD has decent chances to spend the upcoming trading sessions in a range.
At the same time, the market may be very sensitive to additional positive or negative data so traders will have to monitor both COVID-19 numbers and economic data to determine the market mood.
Technical Analysis
USD/CAD continues to trade below the 20 EMA at 1.3610 and fails to get upside momentum. At this point, it looks like USD/CAD has found some minor support near 1.3550. This level has already been tested several times although it’s hard to say that the attempts to breach it to the downside were significant.
The main support level for USD/CAD is still located at 1.3500. A move below this level will lead to increased downside momentum as the current attempt to rebound after the major downside move in late May – early June will come to an end.
On the upside, the nearest resistance level is the 20 EMA at 1.3610. In case USD/CAD manages to get above this level, it will head towards the 50 EMA which has declined to 1.3690 and has more room to decline as USD/CAD stays at lower levels.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
