USD/CAD Daily Forecast – Attempt To Settle Below 1.3100

USD/CAD Video 12.10.20.

Canadian Dollar Tries To Move Higher Despite Weak Oil

USD/CAD is currently trying to settle below 1.3100 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to settle below the 93 level but did not manage to gain sufficient downside momentum. If the U.S. Dollar Index gets below the 93 level, it will head towards the nearest material support at 92.80 which will be bearish for USD/CAD.

Oil is losing ground today but Canadian dollar managed to ignore oil’s weakness. However, additional oil price downside may ultimately put some pressure on the Canadian currency.

U.S. and Canada did not release any important economic reports today so USD/CAD remained in the hands of general market sentiment. Tomorrow, U.S. will release Inflation Rate and Core Inflation Rate reports for September which will indicate whether inflation is gaining steam in the U.S.

The U.S. Fed has previously signaled that it was ready to tolerate inflation above 2% but the pace of pricing recovery will also matter for policymakers.

Technical Analysis

USD to CAD managed to settle below the support at 1.3135 and is trying to get below 1.3100. If USD to CAD manages to move below 1.3100, it will likely gain additional downside momentum and head towards the next support level at 1.3050.

A move below 1.3050 will open the way to the test of September lows at 1.3000. There are no important levels between 1.3000 and 1.3050 so this move may be fast.

On the upside, the nearest resistance level for USD to CAD is located at the previous support at 1.3135. This resistance level has already been tested during the current trading session and proved its strength.

If USD to CAD manages to get above the resistance at 1.3135, it will gain upside momentum and head towards the major resistance level at 1.3200. A move above the resistance at 1.3200 will push USD to CAD towards the next resistance level which is located at the 20 EMA at 1.3235.

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