USD/CAD Daily Forecast – Canadian Dollar Gains Ground After OPEC+ Decision

Canadian Dollar Moves Higher Against U.S. Dollar

USD/CAD is currently trying to settle back above the resistance at 1.2710 while U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index made an attempt to settle above the resistance at 96.50 but failed to develop sufficient upside momentum and pulled back towards the support level at 96.25. A move below this level will push the U.S. Dollar Index towards the 96 level which will be bearish for USD/CAD.

Today, foreign exchange market traders focused on the economic reports from Canada. The final reading of Producer Prices Index report for November indicated that Producer Prices increased by 0.8% month-over-month. On a year-over-year basis, Producer Prices grew by 18.1%.

Traders also had a chance to take a look at Canada’s Manufacturing PMI report for December. The report indicated that Manufacturing PMI declined from 57.2 in November to 56.5 in December while analysts expected that it would grow to 57.8.

Meanwhile, WTI oil managed to get above the $77 level after OPEC+ decided that it would increase production by 400,000 barrels per day (bpd) in February as Omicron had little impact on demand. In case WTI oil settles above $77, it will head towards the resistance level at $78.50 which will be bullish for oil-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD received support near 1.2680 and made an attempt to get back above 1.2710. If USD to CAD moves above this level, it will test the resistance at the 50 EMA at 1.2720.

A move above the 50 EMA will push USD to CAD towards the resistance at 1.2730. In case USD to CAD gets above this level, it will head towards the next resistance level at the 20 EMA at 1.2760.

On the support side, USD to CAD needs to settle below the support at 1.2680 to continue its pullback. The next support level for USD to CAD is located at 1.2650. If USD to CAD declines below this level, it will head towards the next support at 1.2625.

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