USD/CAD Daily Forecast – Canadian Dollar Moves Higher As WTI Oil Climbs Above $70

U.S. Dollar Is Under Pressure

USD/CAD is currently trying to settle below the support at the 50 EMA at 1.2560 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get below the 50 EMA at 92.45 and is testing the next support level at 92.30. In case this test is successful, the U.S. Dollar Index will head towards the support at 92.15 which will be bearish for USD/CAD.

Today, U.S. reported that Initial Jobless Claims declined from 354,000 (revised from 353,000) to 340,000 compared to analyst consensus of 345,000. Continuing Jobless Claims decreased from 2.91 million (revised from 2.86 million) to 2.75 million compared to analyst consensus of 2.78 million.

Foreign exchange market traders also had a chance to take a look at U.S. Factory Orders report which showed that Factory Orders grew by 0.4% month-over-month in July compared to analyst consensus which called for growth of 0.3%.

It should be noted that Canadian dollar and other commodity-related currencies got a boost after WTI oil managed to climb back above the psychologically important $70 level. If WTI oil settles above this level, it will have a good opportunity to develop additional upside momentum which will be bullish for Canadian dollar.

Technical Analysis

USD to CAD managed to settle below the support level at 1.2590 and moved towards the next support level which is located at the 50 EMA at 1.2560. In case USD to CAD manages to settle below the 50 EMA, it will continue its downside move and head towards the support at 1.2530.

A successful test of the support at 1.2530 will open the way to the test of the next support at 1.2500. If USD to CAD declines below this level, it will head towards the support at 1.2480.

On the upside, the previous support level at 1.2590 will serve as the first resistance level for USD to CAD. In case USD to CAD climbs back above this level, it will move towards the 20 EMA at 1.2615. A move above the 20 EMA will lead to the test of the resistance level at 1.2625.

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