USD/CAD Daily Forecast – Canadian Dollar Gains Ground As WTI Oil Moves To New Highs

U.S. Dollar Is Under Pressure Against Canadian Dollar

USD/CAD is currently trying to settle below the support at 1.2650 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index settled below the support at 93.10 and made an attempt to settle below the 93 level. A move below the 93 level will push the U.S. Dollar Index towards the support at the 20 EMA at 92.85 which will be bearish for USD/CAD.

Today, U.S. reported that Initial Jobless Claims increased from 335,000 (revised from 332,000) to 351,000 while Continuing Jobless Claims grew from 2.71 million (revised from 2.67 million) to 2.85 million.

Foreign exchange market traders also had a chance to take a look at flash readings of PMI reports for September. Manufacturing PMI declined from 61.1 in August to 60.5 in September while analysts expected that it would grow to 61.5. Services PMI decreased from 55.1 to 54.4 compared to analyst consensus of 55. The reports put additional pressure on the American currency.

Meanwhile, Canadian dollar received support as WTI oil managed to get above the $73 level. Currently, WTI oil is trying to settle above $73.50. In case this attempt is successful, WTI oil will move towards the $74 level which will be bullish for commodity-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD settled below the 20 EMA at 1.2690 and is trying to settle below the next support level at 1.2650. In case this attempt is successful, USD to CAD will move towards the support at the 50 EMA at 1.2625.

A move below the support at the 50 EMA will open the way to the test of the next support level at 1.2590. If USD to CAD gets below this level, it will head towards the support at 1.2550.

On the upside, the previous support at the 20 EMA at 1.2690 will serve as the first resistance level for USD to CAD. In case USD to CAD gets back above this level, it will head towards the next resistance at 1.2710. A successful test of this level 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.