USD/CAD Daily Forecast – Test Of Resistance At 1.2130 – FX Empire

USD/CAD Video 13.05.21.

U.S. Dollar Moves Higher Against Canadian Dollar

USD/CAD is currently trying to settle above the resistance at 1.2130 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get back above 90.70 and is trying to develop upside momentum. In case this attempt is successful, it will move towards the resistance at 91 which will be bullish for USD/CAD.

Today, the U.S. reported that Initial Jobless Claims declined from 507,000 (revised from 498,000) to 473,000 while Continuing Jobless Claims decreased from 3.7 million (revised from 3.69 million) to 3.66 million. The reports indicated that the situation in the job market continued to stabilize.

However, they had little impact on currency dynamics on the foreign exchange market as traders were not ready for action after yesterday’s sell-off in riskier currencies which was triggered by the surprising U.S. inflation report.

It should be noted that Treasury yields have pulled back from recent highs but it remains to be seen whether this pullback is sustainable as inflation worries continue to grow. In case Treasury yields continue their upside move in the upcoming trading sessions, the American currency may get more support.

USD to CAD managed to settle above 1.2100 and is trying to settle above the next resistance at 1.2130. In case this attempt is successful, USD to CAD will move towards the resistance at 1.2170.

A successful test of the resistance at 1.2170 will open the way to the test of the resistance at 1.2200. In case USD to CAD manages to settle above this level, it will head towards the next resistance at 1.2250. No important levels were formed between 1.2200 and 1.2250 so this move may be fast.

On the support side, a move below 1.2130 will push USD to CAD back towards 1.2100. If USD to CAD gets below this level, it will head towards the support at 1.2080. A move below the support at 1.2080 will lead to the test of the next support at 1.2065.

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

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