USD/CAD Daily Forecast – Canadian Dollar Finds Itself Under Pressure

USD/CAD Video 03.09.20.

U.S. Dollar Gains More Ground Amid Weaker Oil And Stock Market Sell-Off

USD/CAD is trying to settle above the resistance at 1.3135 as the U.S. dollar continues its rebound against a broad basket of currencies while WTI oil remains under significant pressure.

U.S. Dollar Index made several attempts to settle above the 20 EMA at the 93 level but did not manage to gain sufficient upside momentum. However, U.S. Dollar Index maintains solid chances to continue the current rebound, especially if it gets additional support from a sell-off in the equity market.

Currently, S&P 500 looks ready to record its worst day in several months due to the sell-off in high-flying tech stocks. If this sell-off continues, safe haven assets like the U.S. dollar will get more support which would be bullish for USD/CAD.

Today, the U.S. provided encouraging employment reports. Initial Jobless Claims declined to 881,000 while Continuing Jobless Claims decreased to 13.25 million.

These better-than-expected reports may ultimately provide additional support to the American currency although some traders will prefer to see more data.

Tomorrow, the U.S. will provide Non Farm Payrolls and Unemployment Rate reports. Non Farm Payrolls report is expected to show a creation of 1.4 million jobs. Analysts expect that Unemployment Rate will decrease from 10.2% in July to 9.8% in August.

Technical Analysis

USD to CAD gained significant upside momentum and attempts to settle above the nearest resistance level at 1.3135.

If this attempt is successful, USD to CAD will head towards the next resistance at the 20 EMA at 1.3165. A move above the 20 EMA will mark the end of the previous downside momentum so I’d expect a lot of interest at this level.

If USD to CAD manages to settle above the 20 EMA, it will gain more upside momentum and head towards the next material resistance level at 1.3235.

On the support side, the nearest support for USD to CAD is located at 1.3050, although it may also get some support near 1.3080.

If USD to CAD moves below the support at 1.3050, it will head towards the test of the next support level at the recent lows at 1.3000.

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