USD/CAD Daily Forecast – Canadian Dollar Loses Ground As Oil Slides Below $37

USD/CAD Video 08.09.20.

U.S. Dollar Gained Significant Upside Momentum

USD/CAD managed to get above the 20 EMA at 1.3145 and gained significant upside momentum as the U.S. dollar gained ground against a broad basket of currencies while WTI oil fell below the $37 level.

The U.S. Dollar Index managed to settle above the 20 EMA at 93 and moved towards the next resistance level near 93.50. If the U.S. Dollar Index continues its upside move, it will head towards the test of the 50 EMA level at 94.10 which will be bullish for USD/CAD.

WTI oil found itself under significant pressure as traders are increasingly worried about the speed of the oil demand rebound. Weak oil puts pressure on commodity-related currencies like the Canadian dollar.

Tomorrow, Bank of Canada will announce its Interest Rate Decision and provide comments on its policy.

This will be a very interesting moment for USD/CAD as traders try to guess whether other central banks will be forced to follow the U.S. Federal Reserve’s example and promise to boost inflation above 2% to help the recovery.

Technical Analysis

USD to CAD has finally settled above the resistance at the 20 EMA at 1.3145. This is a very important moment for USD to CAD since a move above the 20 EMA signals that the previous downside momentum has come to an end.

At this point, USD to CAD will try to establish a new upside trend. To do this, USD to CAD needs to stay above the 20 EMA and get to the test of the next important resistance level at 1.3235.

If USD to CAD is able to get above the resistance at 1.3235, it will head towards the 50 EMA at 1.3275. A move above 1.3275 will open the way to the test of the next resistance level at 1.3330.

On the support side, the previous resistance at the 20 EMA at 1.3145 will serve as the first important support level for USD to CAD. If USD to CAD moves below the 20 EMA, it will gain downside momentum and head towards the next support level at 1.3050. A move below 1.3050 will open the way to the test of the recent lows at 1.3000.

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