USD/CAD Daily Forecast – Canadian Dollar Gains Ground As WTI Oil Tests The $80 Level

U.S. Dollar Pulls Back Against Canadian Dollar

USD/CAD is currently trying to settle back below the support at 1.2730 while U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index is located near the resistance level at 96.25. In case the U.S. Dollar Index manages to get back above this level, it will move towards the next resistance at 96.50 which will be bullish for USD/CAD.

Today, U.S. released Initial Jobless Claims report which indicated that 207,000 Americans filed for unemployment benefits in a week compared to analyst consensus of 197,000. Continuing Jobless Claims increased from 1.72 million to 1.75 million. Factory Orders grew by 1.6% month-over-month in November compared to analyst consensus which called for growth of 1.5%.

Foreign exchange market traders also focused on the dynamics of commodity markets as WTI oil managed to get to the test of the $80 level amid unrest in Kazakhstan. If WTI oil moves above the $80 level, it will gain additional upside momentum which will be bullish for commodity-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD has recently moved back below the 20 EMA at 1.2760 and is trying to settle below the support level at 1.2730. In case this attempt is successful, USD to CAD will get to another test of the next support level at the 50 EMA at 1.2720.

In case USD to CAD declines below the 50 EMA, it will head towards the support level at 1.2710. A successful test of this level will push USD to CAD towards the next support at 1.2680.

On the upside, a move above 1.2730 will push USD to CAD back towards the 20 EMA at 1.2760. If USD to CAD manages to settle above the 20 EMA, it will move towards the resistance level at 1.2780. A successful test of this level will push USD to CAD towards the resistance at 1.2800.

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