Canadian Dollar Tries To Gain More Ground Against U.S. Dollar
USD/CAD managed to settle below the support at 1.2385 and is moving towards the support level at 1.2350 while the U.S. dollar is gaining some ground against a broad basket of currencies.
The U.S. Dollar Index continues to test the nearest resistance level at 92. If the U.S. Dollar Index fails to settle above this level, it will decline towards the support level at 91.80 which will be bearish for USD/CAD.
Today, U.S. reported that Existing Home Sales declined by 0.9% month-over-month in May compared to analyst forecast which called for a decline of 1%. The report came mostly in line with analyst estimates and had no material impact on currency dynamics.
Tomorrow, foreign exchange market traders will focus on flash PMI reports from U.S. Analysts expect that Manufacturing PMI declined from 62.1 in May to 61.5 in June. Services PMI is expected to decline from 70.4 to 70. PMI numbers are projected to stay at high levels, but any negative surprises may put pressure on the U.S. dollar.
USD to CAD declined below the support at 1.2385 and is trying to get to the test of the next support level at 1.2350. RSI has recently moved out of the overbought territory, and there is plenty of room to gain downside momentum in case the right catalysts emerge.
If USD to CAD manages to settle below the support at 1.2350, it will head towards the next support level at 1.2325. A successful test of this level will open the way to the test of the next support at 1.2300.
On the upside, the previous support at 1.2385 will serve as the first resistance level for USD to CAD. If USD to CAD settles above this level, it will move towards the next resistance which has recently emerged at 1.2400.
A move above 1.2400 will push USD to CAD towards the resistance at 1.2420. If USD to CAD gets above the resistance at 1.2420, it will head towards the next resistance level at 1.2450.
For a look at all of today’s economic events, check out our economic calendar.