USD/CAD Daily Forecast – Canadian Dollar Loses Some Ground After Yesterday’s Move

USD/CAD Video 10.09.20.

U.S. Dollar Tries To Gain More Ground Against The Canadian Dollar Despite Weak U.S. Employment Reports

USD/CAD is trying to stay above the 20 EMA at 1.3155 as the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. dollar found itself under material pressure after the release of disappointing U.S. Initial Jobless Claims and Continuing Jobless Claims reports.

The reports indicated that the U.S. job market recovery faced certain problems as Initial Jobless Claims remained flat at 884,000 while Continuing Jobless Claims increased from 13.29 million to 13.39 million.

The general pressure on the American currency could have been more significant but Brexit-related problems of the British pound provided some support to U.S. Dollar Index.

Today, the U.S. Dollar Index declined to 92.70 but managed to rebound back above 93. In case the U.S. Dollar Index manages to stay above the 93 level, it will have good chances to gain more upside momentum which would be bullish for USD/CAD.

Meanwhile, WTI oil failed to gain more upside momentum which was a negative development for the Canadian dollar.

Tomorrow, U.S. will provide Core Inflation Rate and Inflation Rate reports for August. Analysts expect that Inflation Rate will increase by 1.2% on a year-over-year basis while Core Inflation Rate will grow by 1.6%.

Technical Analysis

USD to CAD failed to settle below the nearest support level at 1.3135 and is trying to gain more upside momentum above the 20 EMA at 1.3155.

In case this attempt is successful, USD to CAD will head towards the next material resistance level at 1.3235. There are no material levels between the 20 EMA at 1.3155 and the resistance at 1.3235 so this move may be fast.

In case USD to CAD manages to get above the resistance at 1.3235, it will head towards the next resistance level at the 50 EMA at 1.3265.

On the support side, USD to CAD needs to settle below the support at 1.3135 to gain more downside momentum. If this happens, USD to CAD will head towards the next support level at 1.3050.

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