USD/CAD Daily Forecast – Canadian Dollar Gains More Ground Against U.S. Dollar

U.S. Dollar Is Losing Ground Against Canadian Dollar

USD/CAD has recently managed to get below 1.2700 while U.S. dollar moved lower against a broad basket of currencies.

The U.S. Dollar Index settled below the support at 96.25 and is testing the next support at 96. In case this test is successful, the U.S. Dollar Index will move towards 95.75 which will be bearish for USD/CAD.

Today, U.S. released ADP Employment Change report which indicated that private businesses added 807,000 jobs in December compared to analyst consensus of 400,000. Treasury yields moved higher after the release of job market data but failed to provide support to the American currency.

Foreign exchange market traders also had a chance to take a look at the final reading of U.S. Services PMI report for December. The report indicated that Services PMI decreased from 58 in November to 57.6 in December compared to analyst consensus of 57.5.

Traders also focused on the developments in commodity markets as WTI oil has recently managed to get to the test of the resistance level at $78.50. If WTI oil gets above this level, it will move towards the resistance at $79.50 which will be bullish for commodity-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD is moving towards the support level at 1.2680. If USD to CAD settles below this level, it will head towards the next support at 1.2650.

A move below the support at 1.2650 will push USD to CAD towards the next support level at 1.2625. In case USD to CAD gets below this level, it will head towards the support at 1.2590.

On the upside, USD to CAD needs to get back above the resistance at 1.2710 to have a chance to develop upside momentum in the near term. if USD to CAD gets above 1.2710, it will move towards the resistance level which is located at the 50 EMA near 1.2720. A successful test of the resistance at the 50 EMA will push USD to CAD towards the next resistance level at 1.2730.

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