USD/CAD Daily Forecast – Canadian Dollar Is Losing Ground As Oil Pulls Back

U.S. Dollar Rebounds Against Canadian Dollar

USD/CAD is currently trying to settle back above the resistance at 1.2340 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index received support near 93.50 but failed to develop upside momentum. The nearest resistance level for the U.S. Dollar Index is located at 93.75. In case the U.S. Dollar Index gets to the test of this level, USD/CAD will get more support.

Today, U.S. reported that Initial Jobless Claims declined from 296,000 (revised from 293,000) to 290,000 while Continuing Jobless Claims decreased from 2.6 million (revised from 2.59 million) to 2.48 million. Existing Home Sales grew by 7% month-over-month in September while analysts expected that they would grow by 1.2%.

In Canada, ADP Employment Change report indicated that economy added 9,600 jobs in September compared to analyst forecast of 51,000.

The economic reports had minimal impact on currency dynamics, and foreign exchange market traders focused on the developments in commodity markets. WTI oil gained downside momentum and made an attempt to settle below the $81 level which was bearish for commodity-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD is currently testing the resistance level at 1.2340. In case this test is successful, USD to CAD will move towards the next resistance which is located at 1.2380.

A move above 1.2380 will open the way to the test of the resistance at 1.2400. If USD to CAD gets above 1.2400, it will continue its rebound and head towards the next resistance level at 1.2425.

On the support side, USD to CAD needs to get back below 1.2340 to have a chance to develop downside momentum in the near term. The next support level for USD to CAD is located at 1.2320.

A successful test of the support at 1.2320 will push USD to CAD towards the next support at 1.2300. If USD to CAD declines below this level, it will head towards the support at 1.2270.

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