USD/CAD Daily Forecast – U.S. Dollar Tries To Rebound Against Canadian Dollar

USD/CAD Video 25.02.21.

U.S. Dollar Is Moving Higher After Sell-Off

USD/CAD has recently made an attempt to settle below the support at 1.2490 but lost downside momentum and rebounded towards the resistance at 1.2525 while the U.S. dollar remained under pressure against a broad basket of currencies.

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The U.S. Dollar Index settled below the support level at 90 and made an attempt to get below the next support level at 89.75. Currently, the U.S. Dollar Index continues to trade in a range between the support at 89.75 and the resistance at 90. If the U.S. Dollar Index declines below 89.75, it will gain additional downside momentum which will be bearish for USD/CAD.

Today, the U.S. reported that Initial Jobless Claims declined from 841,000 (revised from 861,000) to 730,000 compared to analyst consensus of 838,000. The better-than-expected report failed to provide support to the U.S. dollar.

Meanwhile, Treasury yields continued to move higher and put material pressure on precious metals and stocks. However, higher yields did not boost the American currency which typically benefits from higher yield environment.

Tomorrow, foreign exchange market traders will focus on Personal Income and Personal Spending reports from the U.S. which will show how stimulus checks boosted consumption in January. Analysts expect that Personal Income grew by 9.5% month-over-month in January while Personal Spending increased by 2.5%.

[fx-article-ad]Technical Analysis

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USD to CAD is currently trying to get back above the resistance at 1.2525. If this attempt is successful, USD to CAD will gain additional upside momentum and head towards the next resistance level which is located at 1.2550.

In case USD to CAD gets above 1.2550, it will head towards the resistance at 1.2590. A move above this level will push USD to CAD towards the resistance which is located at 1.2625.

On the support side, a move below 1.2525 will open the way to the test of the support level at 1.2490. USD to CAD managed to get below this level during the current trading session but failed to develop additional downside momentum. If USD to CAD declines below the support at 1.2490, it will move towards the next support at 1.2450.

For a look at all of todays economic events, check out our economic calendar.