USD/CAD Daily Forecast – Canadian Dollar Moves Higher As WTI Oil Settles Above $70
U.S. Dollar Is Losing Ground Against Canadian Dollar
USD/CAD is currently trying to settle back below the support at 1.2650 while the U.S. dollar is losing ground against a broad basket of currencies.
The U.S. Dollar Index did not manage to settle above the resistance at 92.80 and is currently trying to settle below the support at the 20 EMA at 92.60. If this attempt is successful, it will move towards the 50 EMA at 92.45 which will be bearish for USD/CAD.
Today, foreign exchange market traders had a chance to take a look at U.S. Consumer Inflation Expectations report for August which showed that consumers expected inflation of 5.2% compared to analyst forecast of 4.9%.
Interestingly, higher inflation expectations failed to provide additional support to the American currency. It looks that traders are waiting for Inflation Rate and Core Inflation Rate reports which will be published on Tuesday, and are not ready to make big move ahead of these reports.
Meanwhile, WTI oil managed to settle above the psychologically important resistance level at $70 and made an attempt to settle above the $71 level, providing support to commodity-related currencies, including Canadian dollar.
USD to CAD is currently testing the support level at 1.2650. In case this test is successful, USD to CAD will move towards the next support which is located near the 20 EMA at 1.2625.
A move below the 20 EMA will push USD to CAD towards the next support at 1.2590. This support level has been recently tested and proved its strength. A move below the support at 1.2590 will lead to a test of the support at 1.2580.
On the upside, USD to CAD needs to get back above 1.2650 to have a chance to gain upside momentum in the near term. The next resistance level for USD to CAD is located at 1.2685.
If USD to CAD manages to settle above the resistance at 1.2685, it will move towards the next resistance at 1.2710. A move above this level will push USD to CAD towards the resistance at 1.2730.
For a look at all of today’s economic events, check out our economic calendar.