USD/CAD Daily Forecast – Canadian Dollar Is Under Pressure As WTI Oil Moves Below $70

Canadian Dollar Declines Against U.S. Dollar

USD/CAD is currently trying to get above the resistance level at 1.2800 while the U.S. dollar is under pressure against a broad basket of currencies.

The U.S. Dollar Index gained strong downside momentum and managed to get to the 96 level. In case the U.S. Dollar Index declines below this level, it will move towards the support at 95.75 which will be bearish for USD/CAD.

Today, foreign exchange market traders focused on the news about the new variant of coronavirus, which have put significant pressure on global markets.

WTI oil found itself under huge pressure and is down by more than 10% today on fears that countries will introduce travel curbs. The major sell-off in the oil market put significant pressure on commodity-related currencies, including Canadian dollar. While the U.S. dollar was under heavy pressure against a broad basket of currencies today, it was able to gain ground against Canadian dollar due to weakness in the oil markets.

Technical Analysis

USD to CAD managed to settle above the resistance level at 1.2780 and is trying to settle above the next resistance which is located at 1.2800.

In case this attempt is successful, USD to CAD will move towards the next resistance level at 1.2825. A move above this level will open the way to the test of the resistance at 1.2850.

On the support side, the previous resistance level at 1.2780 will serve as the first support level for USD to CAD. It should be noted that RSI is in the overbought territory, so the risks of a pullback are increasing.

In case USD to CAD manages to settle below the support at 1.2780, it will move towards the next support level at 1.2760. A move below this level will push USD to CAD towards the support at 1.2730. In case USD to CAD declines below the support at 1.2730, it will head towards the next support level at 1.2700.

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