USD/CAD Daily Forecast – Canadian Dollar Gains Ground As Oil Gets To New HighsUSD/CAD failed to settle above 1.2685 and declined towards the support at 1.2650.
Canadian Dollar Moves Higher As WTI Oil Tests The $73 Level
USD/CAD is currently trying to settle below the support level at 1.2650 while the U.S. dollar is losing ground against a broad basket of currencies.
The U.S. Dollar Index is currently stuck between the support level at the 50 EMA at 92.45 and the resistance level at the 20 EMA at 92.60. In case the U.S. Dollar Index settles above the 20 EMA, USD/CAD will get more support.
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Today, foreign exchange market traders had a chance to take a look at inflation data from Canada. The reports indicated that Inflation Rate increased by 0.2% month-over-month in August compared to analyst consensus of 0.1%. On a year-over-year basis, Inflation Rate increased by 4.1% compared to analyst consensus of 3.9%. Core Inflation Rate grew by 3.5% year-over-year compared to analyst forecast of 3.3%.
In the U.S., traders focused on Industrial Production and Manufacturing Production reports. Industrial Production increased by 0.4% month-over-month, in line with the analyst consensus. Manufacturing Production grew by 0.2% compared to analyst consensus of 0.4%.
It should be noted that WTI oil has recently made an attempt to settle above the $73 level which provided support to commodity-related currencies, including Canadian dollar.
USD to CAD has recently made another attempt to settle above 1.2685 but failed to develop sufficient upside momentum and pulled back towards the support level at 1.2650.
If USD to CAD settles below this level, it will head towards the 20 EMA at 1.2635. A successful test of this level will lead to the test of the next support at 1.2625. In case USD to CAD declines below the support at 1.2625, it will head towards the next support which is located near the 50 EMA at 1.2590.
On the upside, USD to CAD needs to settle above the resistance level at 1.2685 to have a chance to develop upside momentum in the near term. The next resistance is located at 1.2710. This level has been tested during the current trading session and proved its strength. A move above 1.2710 will push USD to CAD towards the resistance at 1.2730.
For a look at all of today’s economic events, check out our economic calendar.