USD/CAD Daily Forecast – Canadian Dollar Is Under Pressure At The Start Of The Week
U.S. Dollar Gains Ground Against Canadian Dollar
USD/CAD made an attempt to settle above the resistance at 1.2900 but lost momentum and declined towards 1.2830 while the U.S. dollar lost momentum against a broad basket of currencies.
The U.S. Dollar Index faced strong resistance at 93.40 and declined towards 93.20. The nearest support level for the U.S. Dollar Index is located at 93.10. In case the U.S. Dollar Index declines below this level, it will head towards the support at 92.80 which will be bearish for USD/CAD.
While it’s an Election Day in Canada, foreign exchange market traders focused on general market sentiment and dynamics of commodity markets which were under pressure on fears about financial problems of China’s Evergrande.
U.S. dollar was gaining ground against a broad basket of currencies as demand for safe-haven assets increased. However, traders were not ready to push the U.S. currency towards yearly highs as they remained cautious ahead of the Fed meeting.
Meanwhile, Canadian dollar was under pressure as WTI oil made an attempt to settle below the psychologically important $70 level. If WTI oil settles below this level, it will head towards the 50 EMA at 69.40 which will be bearish for commodity-related currencies, including Canadian dollar.
USD to CAD is currently trying to settle back above 1.2830. RSI is close to the overbought territory, but there is enough room to gain upside momentum in case the right catalysts emerge.
In case USD to CAD manages to settle above 1.2830, it will head towards the next resistance level at 1.2850. A successful test of this level will open the way to the test of the resistance at 1.2865. If USD to CAD gets above 1.2865, it will head towards the next resistance at 1.2900.
On the support side, a move below 1.2830 will push USD to CAD towards the support at 1.2785. In case USD to CAD declines below 1.2785, it will head towards the support at 1.2760. A move below 1.2760 will open the way to the test of the support at 1.2730.
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