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Fed's Goolsbee says 'It makes sense to wait' before cutting rates

USD/CAD Daily Forecast – Test Of Resistance At 1.2480

Vladimir Zernov
·2 min read

U.S. Dollar Moves Higher After Hawkish Comments From Fed’s Bullard

USD/CAD is currently trying to settle above the resistance at 1.2480 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get back above the resistance at 92 and is testing the next resistance level which is located at 92.15. In case this test is successful, the U.S. Dollar Index will move towards the resistance level which is located near the 20 EMA at 90.30 which will be bullish for USD/CAD.

Today, U.S. reported that Personal Income increased by 0.1% month-over-month in June while Personal Spending grew by 1%. Both reports exceeded analyst expectations.

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Foreign exchange market traders also had a chance to take a look at the final reading of U.S. Consumer Confidence report for July which showed that Consumer Confidence declined from 85.5 in une to 81.2 in July compared to analyst consensus of 80.8.

U.S. dollar received additional support after Fed’s Bullard stated that Fed should begin to reduce its asset purchase program this fall and finish the program at the beginning of 2022. It should be noted that the recent Fed’s commentary remained dovish, and it remains to be seen whether Bullard’s views are shared by the majority of Fed members.

Technical Analysis

USD to CAD managed to settle above the resistance at 1.2450 and is testing the next resistance level at 1.2480. In case this test is successful, USD to CAD will move towards the resistance at 1.2500.

A move above the resistance at 1.2500 will open the way to the test of the resistance at the 20 EMA at 1.2520. If USD to CAD gets above this level, it will head towards the next resistance at 1.2550.

On the support side, the nearest support for USD to CAD is located at 1.2450. If USD to CAD gets back below this level, it will move towards the support at the 50 EMA at 1.2435.

A successful test of the support at the 50 EMA will push USD to CAD towards the support at 1.2420. If USD to CAD manages to settle below this level, it will head towards the next support at 1.2385.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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