USD/CAD Daily Forecast – Canadian Dollar Is Moving Higher Against U.S. Dollar

USD/CAD Video 09.10.20.

U.S. Dollar Is Under Serious Pressure Ahead Of The Weekend

USD/CAD gained strong downside momentum and is currently testing the support at 1.3135 as the U.S. dollar continues to lose ground against a broad basket of currencies.

The U.S. Dollar Index settled below the support at 93.35 is moved towards the 93 level. The nearest material support level for the U.S. Dollar Index is located at 92.80 so there is plenty of room to develop additional downside momentum. If this happens, USD/CAD will have a good chance to settle below 1.3135.

Today, Canada provided Employment Change report which indicated that the Canadian economy added 378,200 jobs in September. Analysts expected job growth of 156,600.

Canada’s Unemployment Rate declined from 10.2% in August to 9% in September compared to analyst consensus of 9.7%. Canada’s employment reports were much better than expected and provided material support to the Canadian currency.

Meanwhile, traders continue to follow the U.S. stimulus story. Recently, U.S. Senate Majority Leader Mitch McConnell stated that lawmakers were unlikely to reach consensus on a new coronavirus package deal before the election in November.

The U.S. economy needs additional stimulus and the economic recovery may slow down without additional aid. However, the stimulus story had so many twists that it’s too early to tell whether Republicans and Democrats will fail to make any deal in the upcoming weeks.

Technical Analysis

USD to CAD is currently trying to settle below the nearest support level at 1.3135. In case this attempt is successful, USD to CAD will head towards the next support level at 1.3050.

There are no material levels between 1.3050 and 1.3135 so the downside move may be fast in case the U.S. dollar continues to lose ground against a broad basket of currencies. If USD to CAD gets below 1.3050, it will head towards September lows at 1.3000.

On the upside, a move above 1.3135 will open the way to the test of the resistance level at 1.3200. In case USD to CAD manages to settle above 1.3200, it will head towards the 50 EMA at 1.3270 although it may also face resistance at 1.3235.

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