USD/CAD Daily Forecast – Canadian Dollar Is Under Pressure As Oil Moves Lower
USD/CAD Video 20.04.21.
U.S. Dollar Gains Ground Against Canadian Dollar
USD/CAD is currently trying to settle above the resistance at the 50 EMA at 1.2585 while the U.S. dollar is gaining some ground against a broad basket of currencies.
The U.S. Dollar Index did not manage to settle below the support at the 91 level and moved closer to the nearest resistance at 91.30. A move above the resistance at 91.30 will open the way to the test of the resistance at 91.50 which will be bullish for USD/CAD.
No important economic reports will be released in the U.S. and Canada today so foreign exchange market traders will focus on dynamics of commodity markets.
Commodity markets have recently gained downside momentum amid concerns about the second wave of the virus in India and the continuation of virus-related restrictions in Europe. Oil found itself under pressure after a disappointing report from United Airlines which highlighted weak demand for international travel.
Weaker commodity markets have put material pressure on Canadian dollar and other commodity-related currencies. If the current sell-off continues, USD/CAD will have a good chance to move higher.
USD to CAD managed to settle above the resistance at 1.2565 and is trying to settle above the 50 EMA at 1.2585. In case this attempt is successful, USD to CAD will move towards the next resistance level which is located at 1.2625. RSI is in the moderate territory, and there is plenty of room to gain additional upside momentum in case commodity markets continue to move lower.
In case USD to CAD gets above the resistance at 1.2625, it will move towards the resistance at 1.2650. A successful test of this level will open the way to the test of the resistance at 1.2685.
On the support side, a move below 1.2565 will push USD to CAD back towards the support at the 20 EMA which is located at 1.2550. If USD to CAD declines below this level, it will move towards the next support at 1.2525.