USD / CAD Daily Forecast – Oil Market Rally Increases Canadian Dollar

USD / CAD video 15.02.21.

The US dollar remains under pressure against Canadian dollars

USD / CAD is currently moving towards support at 1.2625, while the US dollar is losing ground against a broad basket of currencies.

The US Dollar Index is currently stuck in the range between support at 90.30 and resistance at 90.50. If the US dollar index falls below the support at 90.30, it will gain further downward momentum and move towards the support at the 90 level, which will be bearish for the USD / CAD.

Today, Canada reported it Housing starts increased from 229,400 (revised from 228,300) in December to 282,400 in January. Analysts expected housing starts to drop to 190,000, so the report was much better than expected. In the meantime Production sales grew by 0.9% month-over-month in December compared to the analyst consensus, which demanded growth of 0.6%.

On Monday, the Canadian dollar and other commodity-related currencies received support from the continuation of the oil market rally. WTI oil managed to get over the psychologically important level of $ 60 in the midst of rising tensions in the Middle East.

While a number of positive catalysts, including Saudi Arabia’s further production cuts and declining crude inventory levels, provide material support for oil, the oil market looks a bit overbought in the short term. If oil retreats from its current level, the Canadian dollar could be exposed to some pressure.

USD to CAD managed to settle below the support at 1.2665 and is trying to get to the test of the next support level located at 1.2625.

If the USD to CAD falls below this level, it will move towards the next support, which is located at the annual lows of 1.2590. If the test at this level is successful, the USD to CAD will gain further downward momentum and move towards the next support level at 1.2550.

On the upside, the previous support of 1.2665 will serve as the first resistance level for USD to CAD. If the USD to CAD gets above this level, it goes against the resistance at 1.2700. A move above this level paves the way for the resistance test at 20 EMA at 1.2730.

To see all of today’s economic events, see ours financial calendar.

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