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

U.S. Dollar Is Moving Lower Against Canadian Dollar

USD/CAD is currently trying to settle below 1.2800 while U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index managed to get below the 96 level and is currently trying to settle below 95.90. In case this attempt is successful, the U.S. Dollar Index will head towards the support level at 95.75 which will be bearish for USD/CAD.

Today, U.S. reported that Pending Home Sales declined by 2.2% month-over-month in November compared to analyst consensus which called for growth of 0.5%. On a year-over-year basis, Pending Home Sales decreased by 2.7%.

The yield of 10-year Treasuries moved from 1.50% to 1.55% today, but this move failed to provide more support to the American currency on the foreign exchange market.

Meanwhile, WTI oil pulled back after EIA Weekly Petroleum Status Report indicated that crude inventories decreased by 3.6 million barrels, exceeding analyst estimates which called for a smaller decline of 3.15 million. Domestic oil production increased from 11.6 million barrels per day (bpd) to 11.8 million bpd, which served as a bearish catalyst for WTI oil.

While weaker oil is a negative catalyst for commodity-related currencies like Canadian dollar, the general weakness of the American currency helped Canadian dollar to gain ground against U.S. dollar today.

Technical Analysis

USD to CAD remains stuck in the range between the support level at 1.2780 and the resistance level at 1.2825. Currently, it is trying to get back below 1.2800. A move below this level will lead to another test of the support level at 1.2780.

If USD to CAD manages to settle below 1.2780, it will move towards the support at 1.2760. In case USD to CAD declines below 1.2760, it will continue its downside move and head towards the next support level which is located at 1.2730.

On the upside, the nearest resistance level for USD to CAD is located at 1.2825. A move above this resistance level will push USD to CAD towards the next resistance at 1.2850. If USD to CAD gets above 1.2850, it will head towards the next resistance level at 1.2890.

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