USD/CAD Daily Forecast – Canadian Dollar Moves Higher As WTI Oil Rebounds

U.S. Dollar Is Losing Ground Against Canadian Dollar

USD/CAD is currently trying to settle back above the 20 EMA at 1.2690 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to settle below the support at 94.20 but failed to develop sufficient downside momentum and rebounded towards 94.40. A move above this level will open the way to the test of the resistance at 94.60 which will be bullish for USD/CAD.

Today, U.S. reported that Initial Jobless Claims increased from 351,000 to 362,000 while Continuing Jobless Claims declined from 2.82 million to 2.8 million.

Foreign exchange market traders also focused on the dynamics of commodity markets. WTI oil was volatile today, which had a significant impact on USD/CAD dynamics. WTI oil has made an attempt to settle below $73.50 but lost momentum and rebounded towards $75.50.

In case WTI oil manages to settle back above this level, it will head towards the resistance near the yearly highs at $77 which will be bullish for commodity-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD has recently managed to get above the 20 EMA at 1.2685 and is moving towards the resistance at 1.2710.

In case USD to CAD manages to settle above the resistance at 1.2710, it will move towards the next resistance level which is located at 1.2730. A move above this level will open the way to the test of the resistance near today’s highs at 1.2760.

On the support side, USD to CAD needs to settle below the 20 EMA at 1.2685 to have a chance to develop downside momentum in the near term. In case USD to CAD settles below the 20 EMA, it will move towards the support at 1.2650. A move below this level will push USD to CAD towards the support at the 50 EMA near 1.2640. A successful test of the support at the 50 EMA will lead to the test of the next support at 1.2625.

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