USD/CAD Daily Forecast – Attempt To Settle Below 1.3050

USD/CAD Video 18.11.20.

U.S. Dollar Is Losing Ground Against Canadian Dollar

USD/CAD is currently trying to get below the support level at 1.3050 while the U.S. dollar is losing ground against a broad basket of currencies.

The American currency remains under pressure on the foreign exchange market, and the U.S. Dollar Index is moving towards the support at 92.10. A move below this level will push the U.S. Dollar Index towards the support at the yearly lows at 91.75 which will be bearish for USD/CAD.

Today, Canada reported that its Inflation Rate increased by 0.4% month-over-month in October compared to analyst consensus which called for growth of just 0.2%. On a year-over-year basis, Inflation Rate increased by 0.7%. Meanwhile, Core Inflation Rate increased by 1% year-over-year compared to analyst consensus of 0.9%.

In the U.S., Housing Starts increased by 4.9% month-over-month while Building Permits were flat compared to the previous month’s level. The U.S. housing market remains in a good shape, but it does not help the American currency which remains under pressure as the market expects years of low interest rates and additional money-printing from the Fed.

Technical Analysis

USD to CAD managed to get below the support at 1.3080 and is trying to settle below the next support at 1.3050. In case this attempt is successful, USD to CAD will gain additional downside momentum and head towards the next support level at 1.3000.

RSI remains in the moderate territory so there is plenty of room to gain momentum in case the right catalysts emerge. If USD to CAD declines below the support at 1.3000, it will quickly get to the test of the next support level at 1.2985.

On the upside, the previous support level at 1.3080 will likely serve as the first resistance level for USD to CAD. In case USD to CAD gets above this level, it will move towards the resistance at 1.3100. A move above this resistance level will open the way to the test of the next resistance at the 20 EMA at 1.3120.

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