USD/CAD Daily Forecast – Canadian Dollar Is Flat Against U.S. DollarUSD/CAD made another attempt to settle above the resistance at 1.2725 but lost momentum and declined closer to 1.2700.
USD/CAD Video 18.02.21.
Resistance At 1.2725 Stays Strong
USD/CAD continues its attempts to settle above the resistance at the 20 EMA at 1.2725 while the U.S. dollar is losing ground against a broad basket of currencies.
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The U.S. Dollar Index gained downside momentum and is testing the support level at the 20 EMA at 90.65. If this test is successful, the U.S. Dollar Index will head towards the next support at 90.50 which will be bearish for USD/CAD.
Today, the U.S. reported that Initial Jobless Claims increased from 848,000 (revised from 793,000) to 861,000 compared to analyst consensus of 765,000. The report was much worse than expected, and the revision of the previous report was also a negative development.
In Canada, ADP Employment Change report indicated that employment in the private sector decreased by 231,000 in January. It should be noted that the previous report was revised from a loss of 28,800 jobs to a gain of 338,200 jobs so the current job market situation is not as bad as the headline numbers imply.
WTI oil pulled back from recent highs which had a negative impact on commodity-related currencies including Canadian dollar, but the broad weakness of the American currency put pressure on USD/CAD.
USD to CAD has recently tested the resistance at the 20 EMA at 1.2725 but failed to develop sufficient upside momentum and pulled back. The nearest support level for USD to CAD is located at 1.2700.
If USD to CAD settles below this level, it will head towards the next support level at 1.2665. This support level has also been tested during the current trading session and proved its strength.
In case USD to CAD declines below the support at 1.2665, it will head towards the next support at 1.2625. A move below this level will open the way to the test of the support at 1.2590.
On the upside, USD to CAD needs to settle above the 20 EMA to have a chance to develop upside momentum in the near term. The next resistance is located at 1.2750. If USD to CAD gets above this level, it will head towards the next resistance at the 50 EMA at 1.2765.
For a look at all of today’s economic events, check out our economic calendar.