USD/CAD Video 03.05.21.
Canadian Dollar Gains Ground Against U.S. Dollar
USD/CAD is currently testing the support at 1.2280 while the U.S. dollar is losing ground against a broad basket of currencies.
The U.S. Dollar Index gained downside momentum and is trying to settle below the support at the 91 level. If the U.S. Dollar Index manages to settle below this level, it will head towards the support at 90.70 which will be bearish for USD/CAD.
Today, the U.S. reported that Manufacturing PMI increased from 59.1 in March to 60.5 in April compared to analyst consensus of 60.6. Construction Spending report indicated that Construction Spending grew by 0.2% month-over-month in March after declining by 0.6% in February (revised from -0.8%). Analysts expected that Construction Spending would grow by 1.9%.
Meanwhile, Canada reported that Manufacturing PMI declined from 58.5 in March to 57.2 in April compared to analyst forecast of 56.
Foreign exchange market traders will also keep an eye on the latest developments in commodity markets which remain in a bullish mode. WTI oil is currently trying to settle above the $64 level while copper is trading close to multi-year highs which is bullish for commodity-related currencies like Canadian dollar. If commodity markets continue to move higher, USD/CAD may find itself under more pressure.
USD to CAD failed to settle above the resistance at 1.2310 and is currently testing the support level at 1.2280. In case this test is successful, USD to CAD will head towards the next support at 1.2250.
A move below the support at 1.2250 will push USD to CAD towards the next support level which is located at 1.2220. In case USD to CAD declines below this level, it will move towards the next support at 1.2170.
On the upside, USD to CAD needs to settle above the resistance at 1.2310 to have a chance to develop upside momentum in the near term. If USD to CAD settles above this level, it will head towards the resistance at 1.2350. A move above the resistance at 1.2350 will push USD to CAD towards the resistance at 1.2365.
For a look at all of today’s economic events, check out our economic calendar.