USD/CAD Daily Forecast – Canadian Dollar Moves Higher On Strong Oil

USD/CAD Video 24.02.21.

U.S. Dollar Is Losing Ground Against Canadian Dollar

USD/CAD is currently trying to settle below the support at 1.2525 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to settle above the resistance at 90.30 but failed to develop sufficient upside momentum and pulled back. As a result, the U.S. Dollar Index remains stuck in a tight range between the support at 90 and the resistance at 90.30. If the U.S. Dollar Index declines below the support at 90, it will move towards the next support at 89.75 which will be bearish for USD/CAD.

Today, foreign exchange market traders are focused on commodity price dynamics and the developments in U.S. government bond markets. WTI oil has recently managed to get above the $63 level, providing support to commodity-related currencies like Canadian dollar. If WTI oil moves closer to the psychologically important $65 level, Canadian dollar will get additional support.

The yield of 30-year Treasuries has made an attempt to settle above 2.29% but lost momentum and pulled back to 2.23%. Higher yields provided support to the U.S. dollar against a broad basket of currencies, but strong commodity markets pushed USD/CAD lower.

Technical Analysis

usd cad february 24 2021

USD to CAD managed to get below the support at 1.2550 and is trying to settle below the next support level at 1.2525. RSI is already close to the overbought territory, but there is plenty of room to gain additional momentum in case the right catalysts emerge.

In case this attempt is successful, USD to CAD will head towards the next support which is located at 1.2490. A move below the support at 1.2490 will push USD to CAD towards the next support at 1.2450.

On the upside, the previous support level at 1.2550 will likely serve as the first resistance level for USD to CAD. If USD to CAD gets back above this level, it will move towards the next resistance which is located at 1.2590. A successful test of this level will open the way to the test of the resistance at 1.2625.

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