USD/CAD Daily Forecast – Canadian Dollar Little Changed Against U.S. Dollar

USD/CAD Video 26.11.20.

U.S. Dollar Gains Some Ground Against Canadian Dollar In Quiet Trading

USD/CAD is trying to rebound in quiet trading while the U.S. dollar is gaining some ground against a broad basket of currencies.

Earlier, the U.S. Dollar Index declined below the 92 level and tried to gain additional downside momentum but received strong support at 91.85 and rebounded back above 92. Despite this rebound, the U.S. Dollar Index is close to yearly lows at 91.75. If the U.S. Dollar Index settles below this level, USD/CAD will find itself under additional pressure.

There are no important economic reports to digest due to the Thanksgiving holiday so foreign exchange market traders will focus on general market sentiment towards the American currency.

At this point, the market believes that another round of U.S. economic stimulus is inevitable. Yesterday, the U.S. reported that Initial Jobless Claims increased to 778,000. This report indicated that the second wave of the virus started to put material pressure on the U.S. job market, and additional stimulus is likely the only way to provide immediate support to both employers and employees.

If traders continue to focus on the potential big stimulus package and rock-bottom interest rates, USD/CAD may continue its downside move.

Technical Analysis

USD to CAD did not manage to settle above 1.3000 and is trying to gain some upside momentum. The nearest resistance level for USD to CAD is located at 1.3050.

If USD to CAD gets above the resistance at 1.3050, it will move towards the next resistance level at the 20 EMA at 1.3080. A successful test of this resistance level will push USD to CAD towards the resistance at 1.3100.

On the support side, USD to CAD needs to settle below the support at 1.3000 to continue its downside move. The next support is located at 1.2985 so USD to CAD will likely receive support in the 1.2985 – 1.3000 area.

In case USD to CAD declines below the support at 1.2985, it will likely gain downside momentum and move towards the next support level at 1.2930.

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