USD/CAD Daily Forecast – Canadian Dollar Rebounds After Sell-Off
USD/CAD Video 27.10.20.
U.S. Dollar Lost Upside Momentum
USD/CAD declined below 1.3200 as the U.S. dollar moved lower against a broad basket of currencies.
The U.S. Dollar Index is currently trading between the support at 92.80 and the resistance at 93. If the U.S. Dollar Index declines below the support at 92.80, it will gain additional downside momentum and head towards the support at 92.50 which will be bearish for USD/CAD.
Today, the U.S. reported that Durable Goods Orders increased by 1.9% in September compared to analyst consensus of 0.5%. Interestingly, the fresh economic data had little impact on the currency market which remained focused on bigger catalysts like the new U.S. stimulus package, the second wave of the virus and the upcoming U.S. presidential election.
At this point, it looks like U.S. Republicans and Democrats will not be able to negotiate a compromise deal before the presidential election. The White House has recently stated that it expected a deal in the coming weeks which means there’s little hope for a deal in the next few days.
USD to CAD is currently trying to settle below the nearest support level at the 20 EMA at 1.3185. In case this attempt is successful, USD to CAD will head towards the next support level at 1.3135.
If USD to CAD manages to settle below the support at 1.3135, it will move towards the next support level at 1.3100. USD to CAD has received strong support near 1.3100 in October, and it will likely need significant catalysts to settle below this level.
In case USD to CAD moves below the support at 1.3100, it will get to the test of the support at the recent lows at 1.3080. A move below 1.3080 will signal that USD to CAD will try to establish a downside trend after a period of range-bound trading in October.
On the upside, USD to CAD needs to get back above the 20 EMA to have a chance to develop upside momentum. A move above the 20 EMA will push USD to CAD towards the next resistance at 1.3200. If USD to CAD gets above 1.3200, it will head towards the 50 EMA at 1.3220.
For a look at all of today’s economic events, check out our economic calendar.