USD/CAD Daily Forecast – Canadian Dollar Moves Higher Against U.S. Dollar

USD/CAD Video 24.12.20.

Canadian Dollar Continues To Gain Ground Against U.S. Dollar

USD/CAD is currently trying to settle below the support at the 20 EMA at 1.2840 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index did not manage to settle below the support at 90.15 and rebounded closer to 90.30. It looks like volatility will be limited on the foreign exchange market today despite news on Brexit and U.S. stimulus.

EU and UK have finally managed to strike a deal and avoid a no-deal Brexit which would have likely presented a serious problem for financial markets.

GBP/USD traders are selling the news, while commodity-related currencies like Canadian dollar or Australian dollar are enjoying some support. However, there are few chances for big moves in holiday-thinned trading.

Today, U.S. lawmakers blocked attempts to change the coronavirus aid package, but U.S. House Speaker Nancy Pelosi stated that the vote will take place on Monday. It remains to be seen whether U.S. President Donald Trump will sign the bill if the changes he requested are not made. Obviously, traders will have an interesting story to follow when they return to their desks on Monday.

Technical Analysis

USD to CAD managed to get below the support at the 20 EMA at 1.2840 and is trying to develop additional downside momentum. RSI is in the moderate territory and there is plenty of room to gain momentum but today’s trading activity will remain low.

The next support level for USD to CAD is located at 1.2800. If USD to CAD settles below this level, it will head towards the support at 1.2775. A move below the support at 1.2775 will push USD to CAD towards the next support level at 1.2750.

On the upside, USD to CAD needs to get back above the 20 EMA to have a chance to develop upside momentum. The next resistance level for USD to CAD is located at 1.2860. If USD to CAD settles above this level, it will move towards the next resistance at 1.2900.

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