USD/CAD Daily Forecast – Another Test Of Resistance At 1.2480

Canadian Dollar Is Losing Some Ground Against U.S. Dollar

USD/CAD is currently trying to settle above the resistance at the 50 EMA at 1.2480 while the U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index has recently made another attempt to settle below the 20 EMA at 93.95 but failed to develop sufficient downside momentum and rebounded towards 94.10. The nearest significant resistance level for the U.S. Dollar Index is located at 94.20. A move above this level will push the U.S. Dollar Index towards the resistance at 94.50 which will be bullish for USD/CAD.

Today, foreign exchange market traders had a chance to take a look at Producer Prices report from U.S. The report indicated that Producer Prices increased by 0.6% month-over-month in October. On a year-over-year basis, Producer Prices increased by 8.6% compared to analyst consensus which called for growth of 8.7%.

Judging by today’s market action, traders are not sure whether these reports show that inflation is under control, although the data is a bit better than expected. In this light, the market will likely be sensitive to U.S. inflation reports which will be released tomorrow.

Technical Analysis

USD to CAD is trying to get above the resistance level at the 50 EMA at 1.2480. In case USD to CAD settles above this level, it will head towards the next resistance which is located at 1.2500.

If USD to CAD manages to settle above the resistance at 1.2500, it will continue its rebound and head towards the next resistance at 1.2530. A move above 1.2530 will open the way to the test of the resistance at 1.2550.

On the support side, the nearest support level for USD to CAD is located at 1.2450. In case USD to CAD settles below this support level, it will move towards the 20 EMA at 1.2425. A successful test of the support at the 20 EMA at 1.2425 will push USD to CAD towards the next support which is located at 1.2400.

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