USD/CAD Daily Forecast – Attempt To Move Above Resistance At 1.3135

USD/CAD Video 13.10.20.

U.S. Dollar Gained Significant Upside Momentum

USD/CAD is trying to settle above the nearest resistance level at 1.3135 as the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index managed to get above the resistance area at 93.20 – 93.25 and gained strong upside momentum. Currently, the U.S. Dollar Index is testing the next resistance level at the 20 EMA at 93.55.

If the U.S. Dollar Index moves above the 20 EMA, it will head towards the next resistance level at the 50 EMA at 93.80. This scenario will be bullish for USD/CAD.

Today, U.S. reported that its Inflation Rate was 1.4% year-over-year in September while Core Inflation Rate was 1.7%. Inflation was a bit softer than the analyst consensus, and the reports put pressure on U.S. government bond yields.

Meanwhile, oil managed to get back above the $40 level as traders cheered optimistic trade data from China. In addition, IMF released its new economic forecast which was more optimistic than the previous one.

However, rising oil failed to provide support to commodity-related currencies including Canadian dollar as dollar’s upside move was very strong.

Technical Analysis

USD to CAD gained upside momentum and is currently trying to get above the resistance level at 1.3135. This resistance level has already been tested several times in recent trading sessions and proved its strength.

In case USD to CAD moves above the resistance at 1.3135, it will head towards the major resistance level at 1.3200. RSI is in the moderate territory and there is plenty of room to gain momentum in case the right catalysts emerge.

If USD to CAD gets above 1.3200, it will move to the test of the resistance at the 20 EMA at 1.3235. A move above the 20 EMA will open the way to the test of the next resistance level at the 50 EMA at 1.3255.

On the support side, some support for USD to CAD has emerged near 1.3100. If USD to CAD manages to settle below this support level, it will gain downside momentum and head towards the next support level at 1.3050.

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