USD/CAD Daily Forecast – Another Test Of Support At 1.2930

USD/CAD Video 02.12.20.

Canadian Dollar Attempts To Gain More Ground Against U.S. Dollar

USD/CAD continues its attempts to settle below the support at 1.2930 while the U.S. dollar remains under pressure against a broad basket of currencies.

The U.S. Dollar Index did not manage to settle above the resistance at 91.50 and gained downside momentum. Currently, the U.S. Dollar Index is testing the nearest support level at 91.15. The American currency is under pressure on the foreign exchange market as traders decrease their purchases of safe haven assets on signs that U.S. may finally deliver a new round of economic stimulus.

U.S. Treasury Secretary Steven Mnuchin has recently stated that U.S. President Donald Trump will sign the coronavirus bill proposed by Senate Majority Leader Mitch McConnell, but it remains to be seen whether Democrats will be happy with the deal that they rejected in the past.

If the U.S. Dollar Index declines below the support at 91.15., it will move towards the next support level at 91 which will be bearish for USD/CAD.

Today, the U.S. released ADP Employment Change report which showed that private businesses hired 307,000 workers in November. The report was worse than analyst expectations and highlighted the negative impact of the second wave of virus. Perhaps, the worsening situation on the job front will provide an additional incentive for Republicans and Democrats to reach a compromise deal.

Technical Analysis

USD to CAD is currently testing the nearest support level at 1.2930. This support level has already been tested several times in recent trading sessions and proved its strength.

In addition, this support level was tested back in November. At that time, USD to CAD received strong support at 1.2930 and quickly rebounded towards 1.3100.

If USD to CAD manages to settle below this key support level, it will gain downside momentum and get to the test of the next support level at 1.2900.

On the upside, USD to CAD must get above the resistance area at 1.2985 – 1.3000 to have a chance to develop upside momentum. A move above this level will push USD to CAD towards the next resistance near the 20 EMA at 1.3025.

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